Question

Justin purchased his dream car worth 18500 on a finance for 4 years. He was offered 6% interest rate.assuming no other chargers and no tax,we want to find his monthly installment.

Answer 1

To calculate Justin's monthly installment, we need to use the formula for calculating the monthly payment for a loan:

P = (r * A) / (1 - (1 + r)^(-n))

where P is the monthly payment, r is the monthly interest rate, A is the loan amount, and n is the total number of payments (in months).

In this case, A = 18500, r = 0.06/12 = 0.005 (since the annual interest rate is 6%, we divide by 12 to get the monthly rate), and n = 4*12 = 48 (since the loan is for 4 years, or 48 months).

Plugging in these values, we get:

P = (0.005 * 18500) / (1 - (1 + 0.005)^(-48))

P ≈ $432.85

Therefore, Justin's monthly installment would be approximately $432.85