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A \( \$ 47,000 \) new car loan is taken out with the terms \( 6 \% \) APR for 48 months. How much are monthly payments on this loan? A. \( \$ 1,103.80 \) B. \( \$ 1,434.94 \) C. \( \$ 1,214.18 \) D. \

1 Answer

6 votes

Answer:

A. $1103.80

Explanation:

You want the monthly payments on a $47,000 loan for 48 months at 6% per year.

Payment

The payment is given by the formula ...

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

where P is the principal amount of the loan, r is the APR, and n is the number of months.

Your loan payment is ...

A = $47000(0.06/12)/(1 -(1 +0.06/12)^-48) ≈ $1103.80

The monthly payment is $1103.80.

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Additional comment

Spreadsheets and numerous calculators and apps can figure this for you.

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A \( \$ 47,000 \) new car loan is taken out with the terms \( 6 \% \) APR for 48 months-example-1
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