Question

15. Choose the best answer

You want to buy a car whose cost is $ 30,000, plan an early payment of 5,000. Assume you are granted a 6% loan, payable in six years, calculate the monthly payment and total interest paid.

Possible Answers:

1. The payment would be $ 414. 32 and interest would be paid for $ 4,831.20

2. The payment would be $ 714.32 and interest would be paid for $ 7,831.20

3.The payment would be $ 514.32 and interest would be paid for $ 5,831.20

4.The payment would be $ 614.32 and interest would be paid for $ 6,831.20

Answer 1

Loan amount = 30000 - 5000	25000
n = 6*12	72
r = 6%/12	0.5%
EMI = Loan amount / ((1-(1+r)^-n)/r) = 25000 / ((1-(1+0.5%)^-72)/0.5%)	414.32
Total interest = Loan amount / ((1-(1+r)^-n)/r) * n - Loan amount = 25000 / ((1-(1+0.5%)^-72)/0.5%) * 72 - 25000	4831.20
Answer : 1. The payment would be $ 414. 32 and interest would be paid for $ 4,831.20
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