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22. You decide finance a $12,000 car at 3% compounded monthly for 4 years. What will your monthly payments be

1 Answer

3 votes

Answer:

$265.60

Step-by-step explanation:

P0 = d(1 - (1+i/k)^-nk / (n/k) (Formula as attached to the question)

P0 = $12,000

i = 0.03

k = 12

n = 4

12,000 = d( 1 - (1+0.03/12)^-4*12) / (0.03/12)

1000 * 0.03 = d(1 - (1.0025)^48

30 = d(1 - 0.997053263)

30 = d(0.112946737)

d = 30 / 0.112946737

d = 265.6119229

d = $265.6

Hence, the monthly payment will be $265.60

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