Question

You want to buy a car, and a local bank will lend you $15,000. The loan would be fully amortized over 4 years (48 months), and the nominal interest rate would be 15%, with interest paid monthly. What is the monthly loan payment? Do not round intermediate calculations. Round your answer to the nearest cent.

$  

What is the loan's EFF%? Do not round intermediate calculations. Round your answer to two decimal places.

%

Answer 1

Calculating Monthly Payment,

Using TVM Calculation,

PMT = [PV = 15,000, FV = 0, N = 48, I = 0.15/12]

PMT = $417.46

Monthly Payment = $417.46

EFF = (1 + 0.15/12)12 - 1

EFF = 16.08%