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Minh wants to bug a car costing 9950.00. She can put 1000.00 down amf finance the rest at 10.9% APR, making monthly payments for three years. How much will she pay in finance charges

1 Answer

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Total cost of the loan is $10,533

Find the monthly payment with interest and multiply by total number of months.

Monthly payment:

Use the formula {\displaystyle A=P*(r(1+r)^{n})/((1+r)^{n}-1)}.

A = the monthly payment.

P = the principal

r = the interest rate per month, which equals the annual interest rate divided by 12

n = the total number of months

p=9950-1000 down payment = $8950

r= 10.9/12 = .9083

n= 3years * 12 months per year = 36

A= 292.58

292.58 per month * 36 months = 10,533

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