Question

The original sale price of a car is $22,194.96. The required down payment is $1,410. What...

The original sale price of a car is $22,194.96. The required down payment is $1,410. What is the monthly payment if the customer can apply for a 3-year auto loan with a promotional financing rate at 2.99%?

$577.36

$598.25

$604.36

$645.36

Based on the information from above, if a customer decides to skip the 2.99% financing promotion loan but take the cash rebate offer, how much cash does the customer need to pay to buy the new car? We assume that regular market interest rate for auto loan is 6%.

$19,264.02

$19,865.92

$21,213.64

$21,275.92
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Homework Answers

Answer #1

As the price of car is 22,194.96 and if we pay down payment of $1410 then we have to take a loan of (22194.96-1410) = $20,784.96

So the formula for EMI is given by

E =

P = Loan Principal = $ 20,784.96

r = 2.99% = 0.0299/12

n = 3 years = 36 months

Putting in Values

E = 20784.96 * (0.0299/12) * ((1 + 0.0299/12)^36/((1 + 0.0299/12)^36) -1)

= 51.789192 * (1.0937240515/1.0937240515 -1)

= 51.789192 * 11.6696198464

= $604.36

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