Jimmy just bought a new Ford SUV for his business.The price of the vehicle was $40,000.Jimmy made a $5,000 down payment and took out an amortized loan for the rest.The car dealership made the loan at 8% interest compounded monthly for five years.He is to pay back the principal and interest in equal monthly installments beginning one month from now.Determine the amount of Jimmy's monthly payment.

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To determine the monthly payment for an amortized loan, you can use the formula for the monthly payment on an amortizing loan, which is P = [r*PV] / [1 - (1 + r)^-n], where P is the monthly payment, r is the monthly interest rate (annual rate divided by 12), PV is the present value or principal amount of the loan, and n is the total number of payments (months).In this case, the principal value (PV) is $40,000 - $5,000 = $35,000 (since Jimmy made a $5,000 down payment), the annual interest rate is 8%, so the monthly interest rate is 8%/12 = 0.6667%, or 0.006667 in decimal form, and the total number of payments (n) is 5 years * 12 months/year = 60 months.Plugging these values into the formula gives:P = [0.006667 * 35,000] / [1 - (1 + 0.006667)^-60] = [233.345] / [1 - (1 + 0.006667)^-60] ≈ $709.67Therefore, Jimmy's monthly payment is approximately $709.67.

Jimmy Just Bought a New Ford SUV for His Business