Question

Suppose you borrow 13,000 for four years at 7% toward the purchase of a car.

Answer 1

Amount borrowed, P = 13000
Interest, i = 0.07/12 per month
number of periods (months), n = 4*12 = 48

Monthly payment,

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

`=(13000(.07/12*(1+.07/12)^(48))/((1+.07/12)^(48)-1)`
=311.30 (to the nearest cent)