Question

You buy a car for 12000 on a simple interest loan at a rate of 6% for 5 years. You will be financing the amount of car and interest. What is your monthly payment

Answer 1

Monthly instalment = 260

Explanation:

Below is the calculation of monthly instalment:

Price of the car, P = 12000

Simple interest, r = 6%

Number of years, t = 5 years

Interest amount = P x r x t

Interest amount = 12000 x 6% x 5

Interest amount = 12000 x 0.06 x 5

Interest amount = 3600

Total amount = 12000 + 3600

Total amount = 15600

Monthly instalment = 15600 / (5x12)

Monthly instalment = 260