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Derek borrows \( \$ 38,579.00 \) to buy a car. He will make monthly payments for 6 years. The car loan has an interest rate of \( 5.32 \% \). What will the payments be?

User Emelie
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Main Answer: The payments will be $633.23 per month.Explanation:Let P = the monthly payment amount.Let A = the amount borrowedLet n = the number of monthly paymentsLet r = the monthly interest rateP = r * A / 1 - (1 + r)^-nUsing the formula above, let's fill in the information from the problem:P = 0.00443 * 38579 / 1 - (1 + 0.00443)^-72 = 0.00443 * 38579 / 1 - (1 + 0.00443)^-72=170.52 / 0.34299= $633.23Derek will need to pay $633.23 per month for 6 years in order to pay off the car loan.

User Akinyele
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