You have recently finished your MBA at the DarnIt Business School. Naturally, you must purchase a...
You have recently finished your MBA at the DarnIt Business School. Naturally, you must purchase a new BMW immediately. The car costs about $21,000. The bank quotes an interest rate of 15% APR for a 72 month loan with a 10 percent down payment. You plan on trading the car in for a new one in two years
1)What will your monthly payment be?
Homework Answers
Car Cost = $ 21000
Down Payment @10% = $ 2100
Loan Amount = Cost - Down Payment
= $ 21000 - $ 2100
= $ 18900
EMI = Loan / PVAF(r%, n)
= $ 18900 / PVAF (0.8333%,72)
= $ 18900 / 53.9787
= $ 350.14
Monthly payment is $ 350.14
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