Question

In: Finance

Ravi Shankar plans to purchase a car for $52,600 and he has $8,600 as a down payment.

Ravi Shankar plans to purchase a car for $52,600 and he has $8,600 as a down payment. He will need to borrow the rest and plans to get a loan for 5 years at 5.60%. His monthly payments on the loan will be closest to:

A) $1,048.49

B) $637.15

C) $842.48

Expert Solution

Price of car = $52,600

Loan amount = Purchase price - Down-Payment

= $52,600 - $8,600

= $44,000

Calculating the monthly loan payment :-

Where, P = Loan amount = $44,000

r = Periodic Interest rate = 5.60%/12 = 0.4666%

n= no of periods = 5 years*12 = 60

Monthly Payment = $842.48

option C

jeff jeffy answered 2 years ago

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