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Homework answers / question archive / A car dealer advertise the sale of a car model far a cash price of P280,000
A car dealer advertise the sale of a car model far a cash price of P280,000. If purchased in installment, the required down payment is 15% and balance payable in 18 equal monthly installments at an interest rate of 1.5% per month. How much will be the required monthly payments?
Correct option is a.
Computation of Monthly Payments using PMT Function in Excel:
=pmt(rate,nper,-pv,fv)
Here,
PMT = Monthly Payment = ?
Rate = 1.5% compounded monthly
NPER = 18
PV = 280,000*(1-15%) = 238,000
FV = 0
Substituting the values in formula:
=pmt(1.5%,18,-238000,0)
PMT or Monthly Payments = 15,185.78
