Answer:
Jesse's monthly car loan payment has to be $2,716.75.
Explanation:
Jesse's monthly car loan payment can be calculated using the formula for calculating the present value of an ordinary annuity as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)
Where;
PV = Present value or amount to borrow = $31,000
P = Monthly car loan payment = ?
r = Monthly interest rate = APR / Number of months in a year = 9.4% / 12 = 0.094 / 12 = 0.00783333333333333
n = Number of months = Number of year * Number of months in a year = 1 * 12 = 12
Substitute the values into equation (1) and solve for P, we have:
$31,000 = P * ((1 - (1 / (1 + 0.00783333333333333))^12) / 0.00783333333333333)
$31,000 = P * 11.4106954292971
P = $31,000 / 11.4106954292971 = $2,716.75
Therefore, Jesse's monthly car loan payment has to be $2,716.75.
