Question

Tiffany has decided to purchase an $11,000 car. She plans on putting $500 down toward the purchase, and financing the rest at a 5.8% interest rate for 4 years. Find her monthly payment.

Answer 1

Answer:

$245.63

Explanation:

The amortization formula is used for the purpose:

A = P(r/12)/(1 -(1 +r/12)^(-12t))

where A is the monthly payment, P is the amount financed, r is the annual interest rate, and t is the number of years.

Filling in the given numbers, we have ...

A = $10,500(0.058/12)/(1 -(1 +0.058/12)^(-12·4)) ≈ $245.63

Tiffany's monthly payment is $245.63.

Answer 2

$245.63

Explanation:

The amortization formula is used for the purpose:

A = P(r/12)/(1 -(1 +r/12)^(-12t))

where A is the monthly payment, P is the amount financed, r is the annual interest rate, and t is the number of years.

Filling in the given numbers, we have ...

A = $10,500(0.058/12)/(1 -(1 +0.058/12)^(-12·4)) ≈ $245.63

Tiffany's monthly payment is $245.63.