Question

Gerritt wants to buy a car that costs $31,000. The interest rate on his loan is 5.67 percent compounded monthly and the loan is for 5 years. What are his monthly payments?

Answer 1

$594.57

Step-by-step explanation:

For computing the monthly payment we need to apply the PMT formula i.e to be shown in the attachment below:

Given that,

Present value = $31,000

Future value or Face value = 0

Rate = 5.67% ÷ 12 months = 0.4725

NPER = 5 years × 12 = 60 years

The formula is shown below:

= PMT(RATE;NPER;-PV;FV;type)

The present value come in negative

So, after applying the formula, the monthly payment is $594.57