Question

6-59 A new car is purchased for $22,000 with a 10% down, 6% loan. The loan is for 4 years. After mak- ing 30 monthly payments, the owner wants to pay off the loan's remaining balance. How much is owed?

Answer 1

To calculate the amount owed on the car loan after making 30 monthly payments, subtract the down payment from the purchase price, calculate the monthly interest rate, determine the number of remaining payments, and use the formula for the remaining balance on a loan.

Step-by-step explanation:

To calculate the amount owed on the car loan after making 30 monthly payments, we need to find the remaining balance on the loan. Here's how you can do it:

1. First, calculate the loan amount by subtracting the down payment (10% of $22,000) from the purchase price: $22,000 - $2,200 = $19,800.
2. Next, calculate the monthly interest rate by dividing the annual interest rate by 12: 6% / 12 = 0.005.
3. Calculate the number of remaining payments by subtracting the number of payments made (30) from the total number of payments (48): 48 - 30 = 18.
4. Using the loan amount ($19,800), monthly interest rate (0.005), and remaining number of payments (18), you can use the formula for the remaining balance on a loan: Remaining Balance = Loan Amount * [(1 + Monthly Interest Rate)^Remaining Payments - 1] / Monthly Interest Rate. Plug in the values to calculate the remaining balance.

The remaining balance on the loan after making 30 monthly payments is $____________.