Question

Jaquan bought an RV for $95,000. He made a down payment of $72,000.

a. What is the remaining balance?
b. What is the monthly payment if financed over 5 years at 6% interest?

Answer 1

a) The remaining balance is $23,000. b) The monthly payment is approximately $435.69.

Step-by-step explanation:

a) To find the remaining balance, we need to subtract the down payment from the total price of the RV. So, the remaining balance is $95,000 - $72,000 = $23,000.

b) To calculate the monthly payment, we can use the loan formula:

R = P * (r(1+r)^n)/((1+r)^n-1)

R = Monthly payment

P = Principal loan amount

r = Monthly interest rate (6% ÷ 12 = 0.06 ÷ 12 = 0.005)

n = Number of monthly payments (5 years × 12 months = 60)

Substituting the values into the formula, we get:

R = $23,000 * (0.005(1+0.005)^60)/((1+0.005)^60-1)

R ≈ $435.69

So, the monthly payment is approximately $435.69.