Question

adan has decided to purchase an $9000 car. he plans on putting 20% down toward the purchase and financing the rest at 7.9% interest rate for 3 years. find his monthly payment
a) $225.29
b) $298.81
c) $204.78
d) $236.89

Answer 1

Answer:

a) $225.29

Step-by-step explanation:

We are given

Adan has decided to purchase an $9000 car

he plans on putting 20% down toward the purchase

so,

loan amount =  80% of 9000

$P=7200$

financing the rest at 7.9% interest rate for 3 years

so,

r=7.9%=0.079

now, we can find i

$i=\frac{0.079}{12}$

i=0.00658

t=3

$n=12\times 3=36$

we can use formula

$PMI=P\frac{i(1+i)^n}{(1+i)^n-1}$

now, we can plug values

$PMI=7200\frac{0.00658(1+0.00658)^{36}}{(1+0.00658)^{36}-1}$

now, we can simplify it

$PMI=225.2765$

So,

His monthly payment is $225.2765