Question

Elin purchased a used car for ​$. She wrote a check for ​$ as a down payment for the car and financed the ​$ balance. The annual percentage rate​ (APR) is ​% compounded​ monthly, and the loan is to be repaid in equal monthly installments over the next years. Which of the following is most near to​ Elin's monthly car​ payment?

a. $167.
b. $172.
c. $188.
d. $200.
e. $218.

Answer 1

d. $200.

Step-by-step explanation:

Note the purchase price is $10,000 while $2,000 was the down payment, the car purchase was financed with $8,000 in loan.

The monthly payment based on a 9% annual percentage rate can be determined using a financial calculator as shown below, bearing in mind that the calculator would be set to its default end mode before making the following inputs:

N=48(number of monthly payments for 4 years that the loan would last)

I/Y=9/12(monthly interest rate which is 9%/12)

PV=-8000(the loan amount)

FV=0(the loan balance after all monthly payments would be zero)

CPT

PMT=$199.08(closest $200)