Question

Wanda green wants to take out a 4 year loan to purchase a car. what type of computation would she use to calculate her monthly payments?

Answer 1

The answer is "Present value of an annuity".

The present value of annuity formula determines the estimation of a progression of future occasional installments at a given time. The present estimation of annuity recipe depends on the idea of time estimation of cash, in that one dollar show day is worth more than that same dollar at a future date.  

Similarly as with any financial related formula that includes a rate, it is critical to ensure that the rate is reliable with alternate factors in the equation. In the event that the installment is every month, at that point the rate should be every month, and likewise, the rate would should be the yearly rate if the installment is yearly.