Question

LOTS OF POINTS!! Claudia buys a new car for ​$11,000. She makes a down payment of ​$2,000 and the dealer gives her an​ add-on loan, charging her an annual interest rate of 9.6​%. If she takes out a 3 year ​loan, what will Claudia​'s monthly payments​ be?

Answer 1

Using the formula
A=P*(r(1+r)^n)/((1+r)^n-1)
Where
A=monthly payment
P=Loan amount =11,000-2,000= $9,000
r=annual interest rate/12 or interest rate per month =9.6/12 =0.8%=0.008
n= number of months 3 years=36 months

A=9,000*(0.008(1+0.008)^36)/((1+0.008)^36-1)
A=9,000*(0.010657)/(0.332229)
A=$288.695
A=$288.70