Question

You want to buy a car for $24,000. You will put 10% down, and finance the remainder over four years at 4.9% interest. What will be your monthly payment?

A. $598
B. $551.62
C. $522.42
D. $496.45

Answer 1

The monthly payment for the car loan will be $551.62.

Step-by-step explanation:

To calculate the monthly payment for a car loan, you can use the formula:

Monthly payment = (principal amount * monthly interest rate) / (1 - (1 + monthly interest rate)^(-number of months))

In this case, the principal amount is $24,000, the monthly interest rate is 4.9% divided by 12, and the number of months is 4 years multiplied by 12. Plugging in these values into the formula, we get:

Monthly payment = ($24,000 * (4.9%/12)) / (1 - (1 + 4.9%/12)^(-4*12))

This simplifies to:

Monthly payment = $551.62