You finance a car that costs $20,000

Finance Dec 23, 2020

You finance a car that costs $20,000. You are able to make a $5,000 down payment. You agree to 9% add on interest over 4 years. What is your monthly car payment?

Expert Solution

we can calculate the monthy loan payment using the following formula

= P * r * ( 1 + r)^n / ((1+r)^n -1)

We are given the following values

P = Principal amount = $15,000

R = 9%

N = 4 Years

Hence using these values in the above formula

15000 * 9% * ( 1+9%)^4/ ((1+ 9%)^4 -1)

=$ 373.28

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