Question

Anthony has decided to purchase a $19,000 car. He plans to put 20% down toward the purchase and to finance the rest at a 6.8% interest rate for 4 years. Find his monthly payment

Answer 1

Total price paid is 20,033.60

Explanation:

20% of 19,000 is 3,800

19,000 - 3,800 = 15,200

6.8% of 15,200 is 1,033.60

3,800 + 15,200 + 1,033.60 = 20,033.60

Answer 2

$362.57

Explanation:

A suitable calculator or finance app can find the monthly payment for you. This result comes from a TI-84 calculator.

___

The second attachment shows the parameters of the payment function. With 20% down, Anthony is only financing 80% of the price of his car. Of course, there are 12 months in a year, so 4 years worth of payments will be 48 payments. The calculator uses negative values for amounts you pay.

___

No doubt your reference material shows you a formula for computing loan payments. One such is ...

A = Pr/(1 -(1+r)^-n)

where r is the monthly interest rate, 0.068/12, and n is the number of payments, 48. The principal amount of the loan, P, will be 19,000×0.80. This formula gives the same result as that shown above and below.