Phil purchased a car today at a price of $8,500. He paid $300 down in cash and financed the balance for 36 months at 5.75 percent, compounded monthly. What is the amount of each monthly loan payment?

Question

Quizplus · Accepted Answer

The amount financed is $8,500 - $300 = $8,200. The monthly interest rate is 5.75% / 12 = 0.47917%. Using the formula for a fixed-rate loan payment, the monthly payment can be calculated, which matches closest to option A, $248.53.

Phil Purchased a Car Today at a Price of $8,500