Question

you take out a $7,500 car loan that calls for 48 monthly payments starting after 1 month at an apr of 6%. what is your monthly payment?

Answer 1

To find the monthly payment of a $7,500 car loan at 6% APR over 48 months, you use the installment loan payment formula with the principal amount, monthly interest rate, and total number of payments.

Step-by-step explanation:

To calculate the monthly payment for a $7,500 car loan with an APR of 6%, and a loan term of 48 months (4 years), you can use the formula for the monthly payment (M) of an installment loan:

M = P * (i / (1 - (1 + i)-n))

Where:

• P = principal amount ($7,500)
• i = monthly interest rate (APR divided by 12)
• n = total number of payments (48)

First, convert the APR of 6% to a monthly interest rate by dividing by 12, which gives i = 0.005 (0.06 / 12). Then plug the values into the formula: Monthly Payment = $7,500 * (0.005 / (1 - (1 + 0.005)-48))

By calculating this, you find the monthly payment amount.