Answer:
To calculate the monthly payments on a $18,000 car loan with a 5% interest rate for 36 months, you can use the formula for calculating loan payments:
Monthly payment = (Loan amount * Monthly interest rate) / (1 - (1 + Monthly interest rate)^(-Number of months))
First, convert the annual interest rate to a monthly interest rate by dividing it by 12. In this case, the annual interest rate is 5%, so the monthly interest rate would be 5% / 12 = 0.05 / 12 = 0.004167 (approximately).
Next, substitute the values into the formula:
Loan amount = $18,000
Monthly interest rate = 0.004167
Number of months = 36
Plugging these values into the formula, we get:
Monthly payment = (18000 * 0.004167) / (1 - (1 + 0.004167)^(-36))
Simplifying the equation, we have:
Monthly payment = (74.505) / (1 - (1 + 0.004167)^(-36))
Calculating further:
Monthly payment = (74.505) / (1 - (1.004167)^(-36))
Monthly payment = (74.505) / (1 - 0.829001)
Monthly payment = (74.505) / (0.170999)
Monthly payment ≈ $435.10
Therefore, your monthly payments for the $18,000 car loan with a 5% interest rate for 36 months would be approximately $435.10.
Explanation:
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