Question

you want to buy a van it costs 20000$. the bank is willing to to give you a 2 1/2 years loan, paid monthly. the annual rate is 6%. what is your monthly payment if you have 1000$ down?

Answer 1

Correct Answer:

Monthly EMI = $ 683.60

Working:

Formula for calculating EMI is as follows:

EMI = P*R*((1+R) ^N / ((1+R) ^N -1))

P = Cost of van – Down payment

P = $ 20,000 - $ 1,000	$ 19,000
R = 6% / 12	0.50% Monthly
N = 2.5 years * 12 Months	30 Months

A	P	$   19,000.00
B	R	0.50%
C =( 1+B)	1+R	100.50%
D = C^12	(1+R)^N	1.161400083
E =D-1	(1+R)^N - 1	0.161400083
F =A*B*(D/E)	E	$ 683.60

End of Answer.

Thanks