Question

Gerritt wants to buy a car that costs $25,750. The interest rate on his loan is 5.25 percent compounded monthly and the loan is for 6 years. What are his monthly payments? Multiple Choice Ο $415.88 Ο $438.58 Ο $426.15 Ο $417.69 Ο $403.77

Answer 1

Present value=$25750
Future value=$0
Annual interest rate=5.25%
Monthly rate=5.25%/12=0.004375
Time is 6 years.
When interest is compounded semiannually, the number of periods=6*12=72

А 1 Present value 25750 2 Future value 3 Interest rate 0.004375 4 Number of periods 5 Payment ($417.69) 6 Formula used: PMT(B3,B4,B1,B2)

So, the monthly payments=$417.69

Answer: Correct option is $417.69