Answer:
Monthly Payment will be $458.76
Explanation:
First, we need to calculate the loan amount
Loan Amount = Purchase price x 85% = $26,000 x 85% = $22,100
No use following formula to calculate the Monthly payment
PV of Annuity = Periodic Annuity Payment x ( 1 - ( 1 + Periodic interest rate )^-numbers of periods ) / Periodic Intertest rate
Where
PV of Annuity = Loan Amount = $22,100
Periodic interest rate = Annual Interest rate / Numbers of payment periods in a year = 9% / 12 = 0.75% = 0.0075
Numbers of Periods = 60 months
Periodic Annuity Payment = Monthly Payment = ?
Placing values in the formula
$22,100 = Monthly Payment x ( 1 - ( 1 + 0.0075 )^-60 ) / 0.0075
$22,100 = Monthly Payment x 48.173373521
Monthly Payment = $22,100 / 48.173373521
Monthly Payment = $458.759650502
Monthly Payment = $458.76
