Question

Mr. Winking is purchasing a car and needs to finance $24,000 from the bank with an annual percentage rate (APR)

Answer 1

Answer:

The monthly payment is $450.71

Step-by-step explanation:

Financial Computing

Given the loan amount A, the loan term t, and the APR (annual percentage rate), the montly payment is computed as

$\displaystyle P=\frac{A}{f}$

where f is

$\displaystyle f=\frac{1-(1+i)^{-n}}{i}$

The provided data is

$\displaystyle A=24,000$

$\displaystyle r=4.8\%$

$\displaystyle t=5\ years$

Since the payments will be made monthly, the values of n and i are:

$\displaystyle i=\frac{4.8}{100\times12}=0.004$

$\displaystyle n=5\times12=60\ months$

Calculating f:

$\displaystyle f=\frac{1-(1+i)^{-n}}{i}$

$\displaystyle f=\frac{1-(1+0.004)^{-60}}{0.004}$

$\displaystyle f=53.25$

Now for the payments:

$\displaystyle P=\frac{24.000}{53.25}=450.71$

$\boxed{\displaystyle P=\ 450.71}$