Question

Bob Rohrman is offering a 2016 Toyota Camry for $29,000. If you have a $5,000 down payment and are able to borrow the rest at a 2.99% APR on a 48 month loan, how much will your payments be?

Answer 1

The monthly payment will be $531.12

Explanation:

Consider the provided information.

After paying $5,000 down payment you need to pay:

$29,000-$5,000=$24,000

APR is 2.99% or APR = 0.299%

Therefore,
`r=(0.0299)/(12)`

n = 48

We can calculate the monthly payment by using the formula:

`P=(r(PV))/(1-(1+r)^(-n))`

Where P is the monthly payment, PV is the present value, r is the rate per period and n is the number of period.

Substitute the respective values in the above formula we get,

`P=((0.0299)/(12)(24000))/(1-(1+(0.0299)/(12))^(-48))`

`P=(59.8)/(0.112593)`

`P\approx531.12`

Hence, the monthly payment will be $531.12