A college student in her senior year is considering purchasi

A college student in her senior year is considering purchasing a new car. The price of the car is $18,500, the sales tax is 8%, and the title, license, and registration fee is $450. The dealer has an innovative financing program for new college graduates that starts with a small monthly payment and the payments will gradually increase. The dealer offered to finance 90% of the price of the car for 48 months at a nominal interest rate of 9% per year, compounded monthly. The first payment is $200 and each successive payment will increase by a constant dollar amount ‘x.’

A) How much is the constant amount “x”?

B) How much is the 48^th payment?

    * In Excel if possible

Solution

Total price= 18500+18500x 8/100+450

=20430

90/100 x 20430= 18387

I=prt= 18387x48/12x9/100= 26458 Rs.

Value of X= 26458 / 200= 132 $(approx.)

48th payment = 132x48x9/100= 136$

By,

Nishant Bhatt