155k views
0 votes
Suppose you want to buy a car. Sale price of the car is $18,427. You can afford to make a down payment of $3,427. The net amount to be financed is $15,000. If the dealer offers 6 year at 6.25% APR (compound monthly), what would the monthly payment be? Choose the one closest to the answer.

User Ironkeith
by
3.5k points

1 Answer

3 votes

Answer:

Monthly payment would be $250.37

Step-by-step explanation:

The monthly payment can be determined using excel pmt formula as follows:

=pmt(rate,nper,-pv,fv)

rate is the APR of 6.25% per year divided by 12 months in a year

nper is the number of years the payments would last which is 6 years multiplied by 12 months

pv is the initial amount of finance which is the net amount of $15,000

fv is the total amounts to be repaid which is unknown

=pmt(6.25%/12,6*12,-15000,0)=$ 250.37

The amount of monthly payment is $250.37

User Seawolf
by
4.2k points