You buy a car for $38,000. You agree to a 60-month loan with a monthly interest rate of 0.55 percent. What is your required monthly payment?

Question

Quizplus · Accepted Answer

The monthly payment can be calculated using the formula for an amortizing loan: P = [r*PV] / [1 - (1 + r)^-n], where P is the monthly payment, r is the monthly interest rate (0.55% or 0.0055), PV is the present value or loan amount ($38,000), and n is the number of payments (60). Plugging in these values gives a monthly payment of approximately $745.29.

You Buy a Car for $38,000