Question

Tasha borrows $9000 to purchase

a new car, she finances the
amount through on amortized
loan at an annual interest rate.
of 9.9% compounted monthly
for 3 years.
Find tasha's monthly car payment

Answer 1

$290

Explanation:

$290

Banks discourage customers paying the loan early

by having customers pay the interest FIRST

If the interest is $1,439 then the first 5 months of the loan the customer pays for is just the interest until the $1439 is paid. This way the bank get its money first. Then the customer pays for the car itself.

if a customer does pay early the bank makes the customer pay a PENALTY

Principal (Loan without including Interest) Per Month

250

Interest per month

40

Total loan amount

9,000

Total interest paid

(over life of loan)

1,439

Total loan & interest paid

10,439

Monthly payment

290