Question

An individual is considering the purchase of a used automobile. The total price is $6200 with $1240 as a down payment and the balance paid in 48 equal monthly payments with interest at 1 % per month. The payments are due at the end of each month. Compute the monthly payment. $130.45 $180.18 $215.20

Answer 1

monthly payment according to interest rate will be $130.45

What is interest rate?

An interest rate is that the quantity of interest due per amount, as a proportion of the quantity lent, deposited, or borrowed. the full interest on an quantity Lententide or borrowed depends on the corpus, the charge per unit, the change of integrity frequency, and also the length of your time over that it's Lententide, deposited, or borrowed.

Main body:

The amount to be repaid in 48 monthly payments = Cost of the automobile - Down Payment ($1240)

A = P(A/P,i,n)

P = 6200-1240 = $4960

n = 48

i = 1% per month

Hence A= 4.960( A/P, 1%, 48)

A = 4960 (0.0263)

A = $130.45

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