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Social ScienceUTPurdedd66 3573 3)recedasCrSuppose that you decide to buy a car for $25,767, including taxes andlicense fees. You saved $8000 for a down payment and can get a 5-year loanat 6.57%. (a) Find the monthly payment for the loan. (b) Find the totalinterest for the loan. (Round to the nearest dollar. For example, $247)12.
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UT Purded d66 3 573 3)reced as Cr 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) 12.
Expert Answer
Not:No intermediate rounding is done, only the answer is rounded to nearest dollar.
a)The cost of buying a car is $25,767 of which $8000 is saved as the down-payment. Therefore, the loan amount is $17,767 (25767 – 8000). Interest rate for a period of 5 year is 6.57%.
To calculate the monthly payment on the loan of $17.767, present value annuity payment formula will be used.
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PV xr P = 1-1/(1+r) where PV=17767 r 6.57% +12 = 0.5475% n 5x12 60
Putting the values in the above equation:
![17767 x 0.005475
P =
60
[1-1/(1+0.005475)]
97.274325
[1-0.720648]
97.274325
0.279352
=S348.2146](https://prod-qna-question-images.s3.amazonaws.com/qna-images/answer/200482fe-eda4-42d1-88a8-e85bcbb63468/22999b3c-a6bf-471a-8292-4590d6117e4f/154moqr.png)
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17767 x 0.005475 P = 60 [1-1/(1+0.005475)] 97.274325 [1-0.720648] 97.274325 0.279352 =S348.2146
Answer: Monthly payment of the loan is $...
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