Question

You want to buy a $13,000 car. The company is offering a 4% interest rate for 36 months (3 years). What will your monthly payments be?

Answer 1

The total amount after 4% interest for 36 months can be determined as,

`\begin{gathered} A=P(1+(r)/(100))^t \\ =13000(1+(4)/(100))^3 \\ =14623.23 \end{gathered}`

The monthly payment can be determined as,

`\begin{gathered} MP=(A)/(t) \\ =(14623.23)/(36) \\ =406.20 \end{gathered}`

Thus, the required monthly payment is $406.20.