Question

It's been a few years since you have graduated, and you are ready to purchase your first brand new car at a cost of $35,000. You have no down payment therefore you ,ust finance the entire amount over 4 years at a rate of 6% APR compounded monthly. What will your monthly payment if you start payments in a month?

Answer 1

Brand new car cost = $35,000

Since there is no down-payment, Loan amount = $35,000

Calculating the Monthly Payment of Loan:-

Where, P = Loan MAount = $35,000

r = Periodic Interest rate =6%/12 =0.5%

n= no of periods = 4 years*12 =48

EMI = $821.98

So, Monthly payments if payments started in a month = $821.98

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