Question

A $28,000 car loan is used to purchase a new car. The loan is for 6 years and has a 5.75% APR. Use the amortization formula to determine the amount of the monthly payments.

Answer 1

`\bf \qquad \qquad \textit{Amortized Loan Value} \\\\ pymt=P\left[ \cfrac{(r)/(n)}{1-\left( 1+ (r)/(n)\right)^(-nt)} \right]`


`\bf \qquad \begin{cases} P= \begin{array}{llll} \textit{original amount}\\ \end{array}\to & \begin{array}{llll} 28,000 \end{array}\\ pymt=\textit{periodic payments}\\ r=rate\to 5.75\%\to (5.75)/(100)\to &0.0575\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{payments are monthly, thus} \end{array}\to &12\\ t=years\to &6 \end{cases} \\\\\\ pymt=28000\left[ \cfrac{(0.0575)/(12)}{1-\left( 1+ (0.0575)/(12)\right)^(-12\cdot 6)} \right]`