Sarah can afford $255 per month for 6 years on a car payment, what is the price of a car that she can afford at this time?

Question

Assume an annual interest rate of 8%.

I do not remember how to solve for problems like this one.

Answer 1

i = .08/12 = .00666... don't round off, carry answer in your calculator's memory
n = 72

amount accumulated
= 255( 1.00666...^72 - 1)/.0066....
= 23,466.46