Question

Esperanza decided to purchase a vehicle with a 15999 MSRP at a 4% interest rate for 6 years the dealership offered her a 1700 cash-back incentive what she accepted taking all these factors into consideration what monthly payment amount can she expect​

Answer 1

$223.71

Explanation:

We are given the following information

• Manufacturer's suggested retail price (MSRP)=$15999
• Cash-back incentive=$1700
• Annual Interest Rate=4%=0.04
• Loan Duration=6 years

We use the loan repayment formula

Monthly Payment,
`A=(P*r(1+r)^n)/((1+r)^n-1)`

Where:

• Loan Amount, P=15999-1700=$14,299
• Monthly Interest Rate, r=0.04/12
• Total Number of Months, n=12 X 6 =72 Months

`A=(14299*(0.04)/(12)(1+(0.04)/(12))^(72))/((1+(0.04)/(12))^(72)-1)\\=\$223.71`

Esperanza can expect to pay $223.71 monthly.