Helen wants to buy a car which costs $50,000. She has saved $10,000 already. The bank...

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Helen wants to buy a car which costs $50,000. She has saved $10,000 already. The bank...

Helen wants to buy a car which costs $50,000. She has saved $10,000 already. The bank offers a loan for 80% of the price of the car at 8% for 5 years with equal monthly payments. If Helen can only save $500 per month to pay the installments on the loan, can she afford to buy the car?

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Answer 1

Answer #1

Amount of mortgage = $40,000 Monthly payment EPMT = Loan + [(1-(1/(1+rn)}}/] 40,000 = [((1-(1/(1.00667460)}}/0.00667] $811.06

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Answer 2

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