Nonannual compounding using a calculator Jesse Pinkman is th

?(Nonannual compounding using a calculator?) Jesse Pinkman is thinking about trading cars. He estimates he will still have to borrow ?$25,000 to pay for his new car. How large will? Jesse\'s monthly car loan payment be if he can get a 2?-year ?(24 equal monthly? payments) car loan from the? university\'s credit union at an APR of 8.7 percent compounded? monthly?

Solution

r = APR/12 = 8.7%/12 = 0.725%, Number of periods of compounding = 2* 12 = 24
Monthly Car loan payment = r(PV)/ (1 - (1+r)^-n )
= 0.725% * 25000 /((1-(1+0.725%)^-24 =1138.68

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