Question
Asked Oct 27, 2019
3 views

Suppose that you decide to buy a car for $25,767, including taxes and license fees. You saved $8000 for a down payment and can get a 5-year loan at 6.57%. (a) Find the monthly payment for the loan. (b) Find the total interest for the loan. (round to the nearest dollar. For example, $247)

check_circle

Expert Answer

star
star
star
star
star
1 Rating
Step 1

a)The cost of buying a car is $25,767 of which $8000 is saved as the down-payment.

Therefore, the loan amount = $(25767 – 8000)

                                             =$17,767

Given, Interest rate for a period of 5 year is 6.57%.

Step 2

To calculate the monthly payment on the loan of $17.767, present value annuity payment formula will be used.

help_outline

Image Transcriptionclose

PV xr P = 1 1- (1+r)" 72 where, PV present value 17767S 6.57% 12 n=5x 12

fullscreen
Step 3

Substitute these values...

help_outline

Image Transcriptionclose

6.57 17767 x 12 P == 1 1 - 60 6.57 1+ 12 97.274325 0.2793 =348.214$

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Math

Advanced Math

Related Advanced Math Q&A

Find answers to questions asked by student like you
Show more Q&A
add