Question

You want to buy a $34,000 car. The company is offering a 4% interest rate for 36 months (3 years). What will your monthly payments be?

Answer 1

$1003.82

Explanation:

You want the monthly payment on a $34,000 loan for 36 months at 4%.

Amortization

The amortization formula tells you the monthly payment on a loan of principal P at rate r for t months will be ...

A = P(r/12)/(1 -(1 +r/12)^-t)

For the given loan parameters, the payment will be ...

A = $34,000(0.04/12)/(1 -(1 +0.04/12)^-36) ≈ $1003.82

Your monthly payments will be $1003.82.

__

Additional comment

All spreadsheets and many calculators have functions for calculating loan values.