Gerritt wants to buy a car that costs $30,000. The interest rate on his loan is 5.59 percent compounded monthly and the loan is

Question

Simora [160]

3 years ago

15

Gerritt wants to buy a car that costs $30,000. The interest rate on his loan is 5.59 percent compounded monthly and the loan is

for 7 years. What are his monthly payments

Business

1 answer:

Nina [5.8K] · Answer 1 · 2022-02-03T04:17:24+03:00

Answer:

Using the formula to calculate the monthly payment: (rate*Present Value) /(1-(1+rate)^(-period). You can use excel to do the calculations with the function: PMT(rate;period;present value)

The amount will be US$ 1,694.57.

To do the calculation you have to remind that the rate must be in the same period, that means that if the interest is in a monthly period the period must be monthly too. In this case the period have to be 84 months (which is 7 years).