Suppose a car cost 32000 and you are allowed to make a down payment of 20%, but have to borrow the remaining 80%. If you are allowed 5 years to pay back the loan, how much will you pay back monthly?

Answer 1

What interest rate is your lender charging you?

Without figuring interest,

32,000 * 0.8 = 25,600

25,600 / 60 = ?

Answer 2

The interest rate is 3.69%

Answer 3

let the monthly payment be P
i = .0369/12 = .003075
n = 60
80% of 32000 = 25600

P( 1 - 1.003075^-60)/.003075 = 25600
P = $467.89