Derek borrows $32,107.00 to buy a car. He will make monthly payments for 6 years. The car loan has an interest rate of 6.26%. After a 13.00 months Derek decides to pay off his car loan. How much must he give the bank?
PVOrdinary Annuity = C*[(1-(1+i/100)^(-n))/(i/100)] |
C = Cash flow per period |
i = interest rate |
n = number of payments |
32107= Cash Flow*((1-(1+ 6.26/1200)^(-6*12))/(6.26/1200)) |
Cash Flow = 536.06 |
PVOrdinary Annuity = C*[(1-(1+i/100)^(-n))/(i/100)] |
C = Cash flow per period |
i = interest rate |
n = number of payments |
PV= 536.06*((1-(1+ 6.26/1200)^(-4.91666666666667*12))/(6.26/1200)) |
PV = 27163.05 |
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