Question

(Annuity payments) Prof. Finance is thinking about trading cars. She estimates she will still have to borrow ​$26,000 to pay for her new car. How large will Prof.​ Finance's monthly car loan payment be if she can get a 5​-year ​(60 equal monthly​ payments) car loan from the VTech Credit Union at 8.5 percent​ APR? Use five decimal places for the monthly percentage rate in your calculations.

Answer 1

Step-by-step explanation:

using the annuity formula = P=R*(1-(1+i )^-n)/i

p= 26000

i= 8.5/12=0.70833%

Payments=5*12=60

R=?

Since we have

26000=R*(1-(1+0.70833%)^-60)/0.70833%

26000=R* 0.34524/0.70833%

26000=R*48.74122

R=26000/48.74122

R=533.42931