Would someone be able to solve this question using the engineering economics equations? Mr.John purchases a...
Would someone be able to solve this question using the engineering economics equations? Mr.John purchases a car for 25,000 and finances his purchase by borrowing the money at 8% per year, compounded monthly. He pays off the loan with equal monthly payments for 5 years. What will the size of his monthly loan payment?
Homework Answers
Initial Cost=Loan amount=L=$25000
Monthly rate of interest=i=8%/12=0.006667
Number of payments=n=5*12=60 (monthly)
Size of monthly payment=L*(A/P,i,n)=25000*(A/P,0.006667,60)
We need to calculate (A/P,0.006667,60)
Monthly payment=25000*0.020276=$506.90
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