Problema Solution
Carly wants to borrow $15,000 to buy a car and have it paid off in the next 4 years. Since
she has a good credit rating, she can finance the car at 6% interest. what is her exact monthly payment?
Answer provided by our tutors
P = $15,000 is the present value of annuity of 4*12 = 48 monthly payments with interest of 6/12 percents per month:
P = $15,000
n = 48 monthly payments
i = 0.06/12 interest per month
R = the monthly payment
P = R [( 1 - (1 + i)^(-n))/i]
15000 = R[(1 - (1 + 0.06/12)^(-48))/(0.06/12)]
R =15000/((1 - (1 + 0.005)^(-48))/0.005)
........
........
R = $352.28 is the monthly payment of the loan.
The exact monthly payment is $352.28.