Question

Noel is considering buying a newer vehicle so that he can have dependable transportation for his new job following graduation. A new 2019 Honda Civic Si is priced at $24,300. One of Honda's special offers is a $500 College Graduate Bonus. Calculate the monthly payment for the following financing offers: (hint: remember to adjust the I/Y for a monthly payment) (10 points)

Answer 1

the interest rate and the finance (loan) period are not given.

Let us assume the annual interest rate to be 6%. We convert this into a monthly rate by dividing by 12 (as there are 12 months in a year)

Let us assume that the finance (loan) period is 10 years

we calculate the monthly payment using the PMT function in Excel with these inputs :

rate = 6%/12

nper = 10*12

pv = 24300 - 500, which is 23800 - the special discount is deducted from the price

monthly payment is $264.23