Homework SourseA commercial bank will loan you 40492 for 4 years to buy a c
A commercial bank will loan you $40,492 for 4 years to buy a car. The loan must repaid in equal monthly payments. The annual interest rate on the loan is 18.34% of the unpaid balance. What is the amount of the monthly payments?
Solution
Ans amount of the monthly payments $ 1196.66
| P = | Monthly Payments |
| PV = | Loan Amount |
| r = | rate of interest |
| n = | no of periods |
| P = | r (PV) |
| 1 - (1 + r )-n | |
| P = | (18.34%/12)*40492 |
| 1 - (1 / (1 + 18.34%/12)^48)) | |
| P = | 618.8527333 |
| 0.517150634 | |
| P = | $ 1196.66 |
