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In: Finance

You are buying a car and need to borrow $15,000. You agreed to pay off the...

You are buying a car and need to borrow $15,000. You agreed to pay off the loan in 5 years by making monthly payments. The interest rate is 8%. Determine the monthly payment amount.  

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Expert Solution

Loan amount for Car = $15000

Calculating the Monthly Payment of Loan:-

Where, P = loan amount = $15,000

r = Periodic Interest rate =8%/12 =0.666%

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

Monthly Payment = $304.39

Monthly Payment as per Excel Function:-

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Monthly Payment = 15,000 * 0.00666 * (1 + 0.00666) 60 (1 + 0.00666)00 – 1

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jeff jeffy answered 2 years ago
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