If you borrow 5000 P to buy a car at 12 r compounded monthly

If you borrow $5000 (P) to buy a car at 12% (r) compounded monthly to be repaid over the next four years (N), what is your monthly payment?(Please show work)

$131/month

$137/month

$1,646/month

$81/month

$104/month

Not enough information given

Solution

Answer )

i/mo = 12%/12 = 1% per month.

N = 4 \' 12 = 48 months.

A = 5000(A/P, 1%, 48) = 5000(0.0263)

A = $131.50 per month.

The Answer is ( a ).