Question

taneeka borrowed 12,000 for a car for 6 years at an APR of 7.25% her monthly payment will be $206.03 true or false

Answer 1

We have following formula to find the monthly payment

`P= (Ai)/(1-(1+i)^(-n) )`

where P= monthly payment

i= rate per period

n= number of periods

A= amount of Loan

In the given problem we have

A=12000

n= number of years × 12 = 6×12= 72

Rate of interest =7.25%

`i=(rate of interest)/(12)`=
`(0.0725)/(12)`

i=0.006042

now we plug the values of i , n and A in the formula

`P=(120000(0.006042))/(1-(1+0.006042)^(-72) )`

`P=(72.504)/(1-(1.00602)^(-72) )`

`P=(72.504)/(0.3519)`

P=$206.03

Hence this is true.