Question

Danielle is considering a loan to borrow money to purchase her first vehicle. The loan is for 4 years at an interest rate of 4.56%. The amount she plans to borrow is $15,600.00. What will be her monthly payment?

Answer 1

To calculate Danielle's monthly payment for the loan, we can use the formula for calculating the monthly payment of a loan. Plug in the given values, and the monthly payment is approximately $375.32.

Step-by-step explanation:

To calculate the monthly payment for Danielle's loan, we can use the formula for calculating the monthly payment of a loan:

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

Plugging in the given values, we have:

Loan Amount = $15,600.00

Annual Interest Rate = 4.56%

Monthly Interest Rate = Annual Interest Rate / 12

Number of Months = 4 years x 12 months/year

Now, let's calculate the monthly payment:

Monthly Payment = ($15,600.00 x 0.0456 / 12) / (1 - (1 + 0.0456 / 12)^(-4 x 12))

Simplifying the equation, we find that Danielle's monthly payment will be approximately $375.32.