Suppose you take out a car loan of $10,000 for 3 years at an annual interest rate of 8 percent, with payments to be made monthly.What will be the approximate monthly payments? The relevant formula is: $$F = P \times \frac { i } { 1 - \left( \frac { 1 } { 1 + i } \right) ^ { N } }$$ .

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The formula for calculating monthly payments on a loan is:$$F = P \times \frac { i } { 1 - \left( \frac { 1 } { 1 + i } \right) ^ { N } }$$where:* F is the monthly payment* P is the principal (the amount of the loan)* i is the monthly interest rate (the annual interest rate divided by 12)* N is the number of months of the loanIn this case, we have:* P = $10,000* i = 8% / 12 = 0.00667* N = 3 * 12 = 36Plugging these values into the formula, we get:$$F = 10000 \times \frac { 0.00667 } { 1 - \left( \frac { 1 } { 1 + 0.00667 } \right) ^ { 36 } } = 313.36$$Therefore, the approximate monthly payments will be $313.36.

Suppose You Take Out a Car Loan of $10,000 for 3