Problema Solution
The price of a new car is $12,000. 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 10%/year compounded monthly. (Round your answers to the nearest cent.)
(a) What monthly payment will she be required to make if the car is financed over a period of 36 mo? Over a period of 48 mo?
Answer provided by our tutors
Since 25% downpayment =25% of 12000=3000
Rest to pay=12000-3000=9000
So amount =9000 $
rate =10%
time =36 months =36/12=3 years=n
so using the formula Amount = Installment [1+(rate/100)]n
9000=Installment [1+(10/100)]3
So installment in one year =6761.83 $
So ,installment every month=(6761.83/12)=563.48 $
Similarly when Time =48 months =4 years
Putting n=4 we get Installment in 1 year=6147.12 $
Each month =(6147.12/12)=512.26 $