You just bought a car and took out a loan for $30,000 and are scheduled to make monthly payments for 6 years at an annual rate of 3.9% APR.Suppose you add $132.01 each month to the contracted monthly car payment.This extra amount is applied to the principal.How long will it take you to pay off your loan of $30,000? Use a calculator to determine your answer.

Question

Quizplus · Accepted Answer

To determine the time it will take to pay off the loan with the additional payment, you can use a loan calculator or a financial formula. By adding $132.01 to the monthly payment, you're paying more towards the principal each month, which reduces the loan term. Given the loan amount, interest rate, and additional payment, calculating or using an online tool shows it will take just over 54 months to pay off the loan.

You Just Bought a Car and Took Out a Loan