Question

Inez Alexander has a car loan of $425 per month at 5.5% annual interest rate. She would like to pay off the car one year early. About how much will her payoff be

Answer 1

The formula of the present value of annuity ordinary is
Pv=pmt [(1-(1+r/k)^(-kn))÷( r/k)]
Pv present value?
PMT monthly payment 425
R interest rate 0.055
K compounded monthly 12
T time 1 year

Pv=425×((1−(1+0.055÷12)^(
−12))÷(0.055÷12))
=4,951.26