A car with a sticker price of $42,200 with factory and dealer rebates of $5,100

Question

(a) Find the monthly payment if financed for 60 months at 0% APR. (Round your answer to the nearest cent.)
$ 1

(b) Find the monthly payment if financed at 2.5% add-on interest for 60 months. (Round your answer to the nearest cent.)
$ 2

(c) Use the APR approximation formula to find the APR for part (b). (Round your answer to one decimal place.)
3 %

Answer 1

a.(42200-5100)/60 = $618.33 Per Month.

b. Po = 42200-5100 = Amount Financed.

P = (Po*r*t)/(1-(1+r)^-t)
r = (2.5%/12)/100% = 0.002083 = Monthly
% rate expressed as a decimal.
t = 60 months.

Plug the above values into the given Eq and get P = $39,505.80.
Monthly = P/60.