Question

What would a monthly payment be on a purchase of a $11,000 car at 6.9% for 3 years? A) $334.39 B) $339.15 C) $344.19 D) -$344.19 please help

Answer 1

The answer would be B.

Answer 2

The correct option is B.

Explanation:

The principal amount of loan is $11,000. Interest rate is 6.9%.

The formula of month installment is

`m=(Pr)/(1-(1+r)^(-N))` .... (1)

Where, P is principal amount, r is monthly interest, N is number of months.

Number of months in 3 years is

`N=3* 12=36`

Monthly interest rate is

`r=(6.9)/(100)* (1)/(12)=0.00575`

Using the month installment formula,

`m=(11000* (0.00575))/(1-(1+0.00575)^(-36))`

`m=339.14535\approx 339.15`

The monthly payment is $339.15. Therefore option B is correct.