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32 You plan to buy a car that has a total "drive-out" cost of $24,700. You...

32

You plan to buy a car that has a total "drive-out" cost of $24,700. You will make a down payment of $3,458. The remainder of the car's cost will be financed over a period of 4 years. You will repay the loan by making equal monthly payments. Your quoted annual interest rate is 9% with monthly compounding of interest. (The first payment will be due one month after the purchase date.) What will your monthly payment be?

$616.88
$524.67
$546.39
$528.61
$492.50
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Answer #1

Total Car cost =$24,700

Loan Amount = 24700 - 3458

Loan Amount = $21,242

Loan Period = 4 years

Interest Rate = 9% monthly compounding

EMI = [P x R x (1+R)n]/[(1+R)n-1]

Monthly Payment = $528.61

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