Question

You are interested in purchasing a used car for $17,250. The dealer offers financing at a rate of 6.8% APR when the purchase is financed for 54 months. If you make a 5% down payment, what would the monthly payment be for this purchase?

Answer 1

Down payment = 0.05 * 17,250 = $862.5

Loan Amount = $17,250 - $862.5 = $16,387.5

Interest per month = 6.8% / 12 = 0.57%

Monthly Payment = 16,387.5(A/P, 0.57%, 54)

                             = 16,387.5(0.02157)

                             = $353.48