Financing a Car Jane agrees to buy a car for a down payment of and payments of per month for . If the interest rate is per year, compounded monthly, what is the actual purchase price of her car
The actual price of Jane’s car.
Jane buys a car for a down payment of and payments of per month for , at the interest rate of per year, compounded monthly.
If the interest rate is then, the interest per time period is
The total no. of installments is
The actual price of Jane’s car is
is the down payment,
is the present value of an annuity,
is the size of each payment,
is the time-period in years and
is the no. of period.
Substitute, the following in the equation given below,
The payment, are made monthly for .
Substitute, 3 for and 12 for in the equation given below,
Substitute 220 for ,
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