Ask a New Question
Menu

George is going to buy a new Chevy Jupiter for $20300. The dealership will offer a loan for the total value of the car at 9.75% APR for 4 years.

Round all answers to the nearest penny. Use Web Loan Calculator to answer part of this question

Okay so i understand how to do it, but my thing is , is that I come out with the correct answer as in the whole number, but when it comes down to the change it be wrong and im not understanding why?

User Icon for Henry Henry answered
7 years ago

P = (Po*r*t)/(1-(1+r)^-t).

Po = $20,300.

r = 0.0975/12 = 0.008125/mo.

t = 4yrs. * 12mo./yr. = 48 mo.

P = (20,300*0.008125*48)/(1-1.008125^-48).
P = 7917/(1-1.008125^(-48)),
P = 7917/0.32187535 = $24,596.48.

M.P. = P/48. = 24,596.48/48 = $512.43.