Question

melissa purchased a car at the price of 20,540 with a down payment of 3,900 and financed the rest paying 8.6% interest compounded monthly over a payment period of 5 years she also had to pay 8.25% sales tax a $955 registration fee and $57 documentation fee what is her monthly payment

Answer 1

$478.06

Explanation:

let's first start out by figuring out the present value of the loan

((20540*1.0825)+955+57)-3900

Which gives me a value of 23246.55

I'm then going to assume that the 8.6% is a nominal interest rate meaning that the effectively monthly rate is equal to .086/12=.0072

Which means we have

23246.55=X(a angle 60 at .0072) (i'm using annuities to solve this if you don't know what this is just ask)

Solve this and get $478.06