Firtz benjamin buys a car costing 20300 He agrees to make pa

Firtz benjamin buys a car costing 20300. He agrees to make payments at the end of each month for 6 years. He oays 6% interest compounded monthly.

What is the ammount of each payment?

Find the total amount of intrest fritz will pay?

What is the ammount of each payment?

Solution

For number of payments used PMT Function on Microsoft excel:

Rate = .06/12=.005,

Nper=6x12=72

PV=20,300, FV=0, type=0 (pmt at end of period)=336.43 Monthly Payment

Find the total amount of intrest fritz will pay?

Solution

Total interest amount = Total payments (336.43x72) - 20,300 (principal amount)

Total interest amount=3922.96