Question

Ivory purchased a car for $24,000. The annual interest rate on the loan is 3.5%. She will make payments for 6 years. What is Ivory’s monthly payment?

Answer 1

Ivory's monthly payment for a $24,000 car loan at a 3.5% annual interest rate over 6 years is approximately $366.72, calculated using the annuity formula for loan payments.

Step-by-step explanation:

Ivory purchased a car for $24,000, and the annual interest rate on the loan is 3.5%. To calculate Ivory's monthly payment over a period of 6 years, we need to use the formula for an annuity, which considers the principal, interest rate, and the number of payments. The formula for the monthly payment (M) on a loan is:

M = P * (i * (1 + i)^n) / ((1 + i)^n - 1)

where:

• P is the principal amount ($24,000)
• i is the monthly interest rate (annual rate / 12)
• n is the total number of payments (years * 12)

First, we convert the annual interest rate to a monthly rate by dividing by 12:

i = 3.5% / 12 = 0.0029167

Then, we calculate the total number of payments:

n = 6 years * 12 months/year = 72

Now, we can plug these values into the loan payment formula:

M = 24000 * (0.0029167 * (1 + 0.0029167)^72) / ((1 + 0.0029167)^72 - 1)

After calculating the above expression, we find that Ivory's monthly payment is approximately $366.72.

Answer 2

11.68 $ a month, i believe thats the answer, if not its pretty close...