You buy a car for $40,000. You agree to a 72-month loan with a monthly interest...

You buy a car for $40,000. You agree to a 72-month loan with a monthly interest rate of 0.35 percent.

a. What is your required monthly payment?

b. What is the total amount interest payment over this period?

Solutions

Expert Solution

Ans.

Monthly interest , i = 0.35% or 0.0035

Principle Amount = 40,000

Period , n = 72

Monthly Payment =

= 629.51

Hence the required monthly payment is $629.51

Total Amount paid with interest = $629.51 x 72 = $45324.72

Extra amount paid as interest = $45324.72 - $40000 = $5324.72

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Rahul Sunny answered 1 year ago

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