Question

You want to buy a new sports car from Muscle Motors for $76,000. The contract is in the form of a 60-month annuity due at an APR of 7.15 percent. What will your monthly payment be?

Answer 1

The formula of the future value of an annuity due is
Fv=pmt [(1+r/k)^(n)-1)÷(r/k)]×(1+r/k)
Fv future value 76000
PMT monthly payment?
R interest rate 0.0715
K compounded monthly 12
N time 60 months
Solve the formula for PMT
PMT=Fv÷[(1+r/k)^(n)-1)÷(r/k)]×(1+r/k)
PMT=76,000÷((((1+0.0715
÷12)^(60)−1)÷(0.0715÷12))
×(1+0.0715÷12))
=1,051.18 ....answer

Hope it helps!