Final answer:
To calculate Edward's monthly payment for a 10-year $14,000 car loan with an APR of 11.1%, we can use the formula for calculating the monthly payment on an installment loan. Plugging in the values, we can calculate the monthly payment.
Step-by-step explanation:
To calculate Edward's monthly payment for a car loan with an APR of 11.1% and a term of 10 years, we can use the formula for calculating the monthly payment on an installment loan:
Monthly Payment = P * r * (1+r)^n / [(1+r)^n - 1]
Where P is the principal amount of the loan, r is the monthly interest rate (APR / 12), and n is the total number of monthly payments (term * 12).
Plugging in the values, we have:
P = $14,000
r = 11.1% / 12 = 0.925%
n = 10 * 12 = 120
So, the formula becomes:
Monthly Payment = $14,000 * 0.925% * (1+0.925%)^120 / [(1+0.925%)^120 - 1]
Calculating this expression gives us the monthly payment for Edward's car loan.