Question

You want to buy a car, and a local bank will lend you $25,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 10% with interest paid monthly. What will be the monthly loan payment

Answer 1

Answer:

The monthly loan payment is:

= $531.18

Explanation:

a) Data and Calculations:

Cost of a car financed by a local bank = $25,000

Period of loan = 5 years (60 months)

Interest rate = 10%

The monthly loan payment is calculated from an online financial calculator:

Auto Price  25000

Loan Term  60 months

Interest Rate  10

Down Payment  0

Monthly Pay:   $531.18

Total Loan Amount $25,000.00

Upfront Payment $0.00

Total of 60 Loan Payments  

$31,870.57

Total Loan Interest $6,870.57

Total Cost (price, interest, tax, fees) $31,870.57