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1. b)What will your monthly payment be if you don't give a down payment on a car loan for $18,990 and finance the whole amount at 3.95% annual interest rate for 6 years.

User Sabella
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Answer: To calculate the monthly payment for a car loan without a down payment, we can use the formula for calculating the monthly payment of a fixed-rate loan:

Monthly Payment = [P * r * (1 + r)^n] / [(1 + r)^n - 1]

where:

P = principal amount (loan amount)

r = monthly interest rate (annual interest rate divided by 12 and converted to a decimal)

n = total number of monthly payments (loan term in years multiplied by 12)

Let's calculate the monthly payment for the given car loan:

Loan amount (P) = $18,990

Annual interest rate = 3.95%

Monthly interest rate (r) = 3.95% / 12 = 0.0395 / 12 ≈ 0.0032917

Loan term = 6 years

Number of monthly payments (n) = 6 years * 12 months/year = 72 months

Now, let's plug these values into the formula:

Monthly Payment = [18990 * 0.0032917 * (1 + 0.0032917)^72] / [(1 + 0.0032917)^72 - 1]

Monthly Payment ≈ [18990 * 0.0032917 * (1.0032917)^72] / [(1.0032917)^72 - 1]

Monthly Payment ≈ [18990 * 0.0032917 * 1.273134] / 0.446215

Monthly Payment ≈ 25.613

So, the monthly payment for the car loan, without a down payment, would be approximately $25.61.

User Farahm
by
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