The price of a new car is $16,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 6%/year compounded monthly. (Round your answers to the nearest cent.)

Question

What monthly payment will she be required to make if the car is financed over a period of 48 mo? Over a period of 72 mo?

What will the interest charges be if she elects the 48-mo plan? The 72-mo plan?

Answer 1

$12,000 loan amount
r = .06/12 = .005
n = 48 or 72
1+r = 1.005
(1+r)^-n = .7871 for n = 48
1 - (1+r)^-n = .2129 for n = 48
payment = loan [ r/(1 -(1+r)^-n ) ]
payment for 48 months = 12,000[.005/.2129]
=$281.82
now you do the 72 months

Answer 2

i got $198.87

what about the interest charges?

Answer 3

LOL
well
12,000/48 = 250 per month with no interest.
you paid 281.82 including the interest at 6% compounded monthly

Answer 4

(281.82-250)*48?

Answer 5

right

Answer 6

Determine the simple interest rate at which will grow to in the months. Round your answer to the nearest tenth of percent