Question

Monthly Payments:1) A new car is purchased and a $20,000 loan is taken. The loan is for 5 years (60 months) and the interest rate is 7,9%compounded monthly. What is the monthly payment?

Answer 1

Answer:

The monthly payment is $160.82

Step-by-step explanation:

Parameters:

Principal, P = $20,000

Time, T = 5 years

Interest Rate, R = 7.9% = 0.079

Number of times compounded per year, n = 12

We have:

`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ \\ =20000(1+(0.079)/(12))^(12*5) \\ \\ =29649.2771 \\ \\ Next,\text{ we calculate monthly payment as:} \\ \\ (A-P)/(12t) \\ \\ =(29649.2771-20000)/(12*5) \\ \\ =160.82 \end{gathered}`