Question

Adam made a down payment of $8000 toward the purchase of a new car. To pay the balance of the purchase price, she has secured a loan from her bank at the rate of 6%/year compounded monthly. Under the terms of her finance agreement she is required to make payments of $470/month for 60 months. What is the cash price of the car? (Round your answer to the nearest cent.)

Answer 1

i = .06/12 = .005
n = 60

PV = 470( 1 - 1.005^-60)/.005
= 24,311.01

add your downpayment of 8000 and you are done.