Question

What would a monthly payment be on a purchase of a $11,000 car at 6.9% for 3 years? A) $334.39 B) $339.15 C) $344.19 D) -$344.19 please help

Answer 1

Answer:

The correct option is B.

Step-by-step explanation:

The principal amount of loan is $11,000. Interest rate is 6.9%.

The formula of month installment is

$m=\frac{Pr}{1-(1+r)^{-N}}$              .... (1)

Where, P is principal amount, r is monthly interest, N is number of months.

Number of months in 3 years is

$N=3\times 12=36$

Monthly interest rate is

$r=\frac{6.9}{100}\times \frac{1}{12}=0.00575$

Using the month installment formula,

$m=\frac{11000\times (0.00575)}{1-(1+0.00575)^{-36}}$

$m=339.14535\approx 339.15$

The monthly payment is $339.15. Therefore option B is correct.

Answer 2

The answer would be B.