VampireQueen01
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Roslyn has decided to purchase a $14,000 car. She plans on putting $2000 down toward the purchase, and financing the rest at a 6% interest rate for 4 years. Find her monthly payment

Roslyn has decided to purchase a 14000 car She plans on putting 2000 down toward the purchase and financing the rest at a 6 interest rate for 4 years Find her m class=

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MrCreighton

using the payment function, a $12,000 loan for 4 years at a rate of 6%, your payment would be $281.82

Answer:

[tex]PMT=\frac{0.005 * 12000}{1-(1+0.005)^{-48}} = 281.82[/tex]

And the monthly payment for this case would be $281.82

Option D.

Explanation:

For this case the total for the car is $14000 and she gives a downpayment of $2000 so then we have remaining $14000-2000 = $12000 that needs to be financed.

For this case we have that the [tex] APR = 6\%[/tex] and the total time is given by t=4 years.

We want to calculate the monthly payment and we can use the following formula:

[tex] PMT = \frac{r PV}{1-(1+r)^{-n}}[/tex]

For this case our value for r is given by [tex] r = \frac{0.06}{12}=0.005[/tex] since we need the rate monthly

[tex] PV= 12000[/tex]

[tex] n = 4*12 = 48 months[/tex] in the 4 years

And if we replace we got:

[tex] PMT= \frac{0.005 * 12000}{1-(1+0.005)^{-48}} = 281.82[/tex]

And the monthly payment for this case would be $281.82

Option D.

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