Final answer:
The interest for the first payment on Flower's car loan is $235.
Step-by-step explanation:
Auto loan interest is the cost of borrowing money to purchase a car. The lender will look at your credit score, debt-to-income ratio and other factors to determine what interest rate it offers. To craft your budget, you should know your rate and how much goes toward your loan balance monthly.
The SBI Automobile Loan Interest Rate begins at 8.55% per annum for new car loans and 11.15% per annum for used car loans. These are fixed vehicle loan interest rates that are among the lowest in India.
To find the interest for the first payment, we need to calculate the interest portion of the monthly payment. The monthly interest rate can be found by dividing the annual interest rate by 12 (the number of months in a year): 6% / 12 = 0.5%.
The interest for the first payment can then be calculated by multiplying the remaining balance of the loan (which is $47,000) by the monthly interest rate:
Interest for first payment = $47,000 * 0.5% = $235