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To buy a car, you borrow $24,000 with a term of five years at an APR of 6%. What is your monthly payment? (Round your answer to the nearest cent.) Option a) $451.50 Option b) $500.00 Option c) $512.82 Option d) $525.00

User Femotizo
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Answer: a\ $451.50.

Explanation: To calculate the monthly payment for a car loan, we need to use the loan amount, loan term, and annual percentage rate (APR).

In this case, the loan amount is $24,000, the term is five years, and the APR is 6%.

To calculate the monthly payment, we can use the formula for a fixed-rate loan:

Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^(-Number of Months))

First, let's calculate the monthly interest rate. We divide the APR by 12 to get the monthly rate:

Monthly Interest Rate = (6% / 100) / 12 = 0.005

Next, we calculate the number of months in the loan term:

Number of Months = 5 years * 12 months/year = 60 months

Now, we can substitute these values into the formula:

Monthly Payment = ($24,000 * 0.005) / (1 - (1 + 0.005)^(-60))

After performing the calculations, the monthly payment rounds to approximately $451.50.

Therefore, the correct answer is option a) $451.50. This represents the approximate monthly payment for borrowing $24,000 with a term of five years at an APR of 6%.

User SVS
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