Question

You were just approved for a $32,000 car loan at an APR of 1.99% for 60 months. As you make payments over time: your payment is , the amount of interest you will pay each month , and the amount of principal you pay each month .

Answer 1

What it Means...

If you borrow $32,000 at 1.99% for 5 years, your monthly payment will be $560.75.

The payments do not change over time. The loan amortizes over the repayment period, meaning the proportion of interest paid vs. principal repaid changes each month. As the loan amortizes, the amount of monthly interest paid decreases while the amount of principal paid increases.

Loan Amount: $32,000
Term (years): 5     (60 Months)

Annual Interest Rate (%): 1.99% Monthly Payment = $560.75


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Amortization Schedule

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