Homework SourseYou can afford a 350 per month car payment Youve found a 5 y
You can afford a $350 per month car payment. You\'ve found a 5 year loan at 5% interest. How big of a loan can you afford?
Solution
PVA = P[{1 - (1 + r)-n} / r]
= $350[{1 - (1 + 0.05/12)-(5*12)} / 0.05/12]
= $350[0.2208/0.0042] = $350*52.99 = $18,546.75
Affordable Loan Amount = $18,546.75
![You can afford a $350 per month car payment. You\'ve found a 5 year loan at 5% interest. How big of a loan can you afford?SolutionPVA = P[{1 - (1 + r)-n} / r] =](/WebImages/14/you-can-afford-a-350-per-month-car-payment-youve-found-a-5-y-1018987-1761526816-0.webp "You can afford a $350 per month car payment. You\'ve found a 5 year loan at 5% interest. How big of a loan can you afford?SolutionPVA = P[{1 - (1 + r)-n} / r] =")
