Question

Follow the steps above and find c, the total of the payments, and the monthly payment. Choose the right answers. Jane Smart buys a new SUV. The price, including tax, is $22,500.00. She finances the vehicle over 60 months after making a $2,000 down payment. The true annual interest rate is 12%. What are Jane's monthly payments (principal plus interest)?

Answer 1

To the nearest penny c
(0.12×20,500×61)÷(2×12)
=6,252.5
Total of payments
20,500+6,252.5
=26,752.5
Monthly payments
26,752.5÷60
=445.875

Answer 2

Jane's monthly payment is $455.6

Explanation:

Given :

The price, including tax, of SUV is $22,500.00.

She finances the vehicle over 60 months after making a $2,000 down payment.

The true annual interest rate is 12%.

To Find : What are Jane's monthly payments

Solution :

Since we are given that he made a down payment of $2000

So, After making the down payment the amount becomes : 22500-2000

=$20500

Now, Formula of monthly payment :

Monthly payment,
`M=\frac{\text{Amount}}{\text{Discount factor}}`

Discount factor
`D=(1-(1+i)^(-n))/(i)`

Where, Amount = $20500

Rate r= 12%=0.12

`i=(0.12)/(12)=0.01`

`n=60`

Now, substituting all the values we get,

`D=(1-(1+i)^(-n))/(i)`

`D=(1-(1+0.01)^(-60))/(0.01)`

`D=(1-(1.01)^(-60))/(0.01)`

`D=(1-0.55)/(0.01)`

`D=(0.45)/(0.01)`

`D=45`

Monthly payment,
`M=\frac{\text{Amount}}{\text{Discount factor}}`

`M=(20500)/(45)`

`M=455.6`

Hence , Jane's monthly payment is $455.6