Question

You want to buy a new sports coupe for $43,685, and the finance office at the dealership has quoted you an 8.4% APR loan for 4 years with monthly payments. What will your monthly payments be? (Do not include the dollar sign ($). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Answer 1

Monthly rate = 8.4 /12 = .70% per month

Number of months = 4*12= 48 months

Monthly payment = Cost to purchase / PVA .70%,48

                    = 43685 / 40.64856

                    = 1074.70 per month

**present value annuity factor can be find using financial calculator or from present annual annuity table.

or using the formula :[1/(1+i)^1+1/(1+i)^2+ 1/(1+i)^3+.........1/(1+i)^48]