Question

1.Anthony has decided to purchase a $19,000 car. He plans to put 20% down toward the purchase and to finance the rest at a 6.8% interest rate for 4 years. Find his monthly payment.

2.Find the total price Anthony paid for the vehicle.

Steps shown please.

Answer 1

First step/Equation

Answer:

$362.57

Explanation:

A suitable calculator or finance app can find the monthly payment for you. This result comes from a TI-84 calculator.

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The second attachment shows the parameters of the payment function. With 20% down, Anthony is only financing 80% of the price of his car. Of course, there are 12 months in a year, so 4 years worth of payments will be 48 payments. The calculator uses negative values for amounts you pay.

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No doubt your reference material shows you a formula for computing loan payments. One such is ...

A = Pr/(1 -(1+r)^-n)

where r is the monthly interest rate, 0.068/12, and n is the number of payments, 48. The principal amount of the loan, P, will be 19,000×0.80. This formula gives the same result as that shown above and below