Question

An installment contract for the purchase of a car requires payments of $328.37 at the end of each month for 5.75 years. Interest is 7% per annum compounded monthly (a) What is the amount financed? (b) How much is the interest cost? (a) The amount financed is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The interest is $7 (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Answer 1

a) The amount financed is $ 18,608.52

b) The interest is $ 4049.012

Given Monthly installment : EMI $ 328-37 Number of years = 5.75 No. of times payment 5.75x121 is made Rate of Interest =R + + - 0.005833 1200 1200 compounded monthly

.: EMI p.g. (1+on [C1+0)" - 1]

328.37 P.o.005833 (1 +0.005833 [ato: 005823) 69 . - ] 328.35 - p. 0.005833_[16005833) 69 [(1.00583349 -1

po(0.005833) (1.49381) (1.493811-D .:. 328-37 p.(0.008713) (0.4938)D 328.37 x 0.4938 0.00 8713 $ 18, 608.52 a The amount mgnced is $ 18,608.52 b> Total payment made = EMI x No. of month 328.37 x 69 = $92,657.53 Interest Total payment Principal made 22, 657.53 - 18,608.52 $ 4049.012