Monthly Payments You are taking out a car loan for $16,000, and you are given the options below. Find the monthly payment and the total amount of money you will pay for each loan. Which option would you choose? Explain your reasoning.
(a) A fixed annual rate of 5%, over a term of 3 years.
(b) A fixed annual rate of 3.5%, over a term of 4 years.
(a)
To calculate: The monthly payment and the total amount of money pay for a fixed rate of change
Given information:
The amount of car loan is
The fixed rate of change
Formula used:
The monthly payment for mortgage P annual rate of
Calculation:
Consider the given information
The amount of car is
Substitute,
(b)
To calculate: The monthly payment and the total amount of money pay for a fixed rate of change
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