Question

You want to buy a new car. You can afford payments of $300 per month and can borrow the money at an interest rate of 5.2% compounded monthly for 5 years.

Answer 1

Answer:

$367.17

Step-by-step explanation:

we are find the cost of the car after 5 years

Using the compound interest formula;

A = P(1+r/n)^nt

Given

Principal P = $300

rate r = 5.2% = 0.052

Time t = 5years

Time of compounding n = 1/12 (monthly)

Substitute into the formula

A = 300(1+0.052(12))^5(1/12)

A = 300(1+0.624)^0.4167

A = 300(1.624)^0.4167

A = 300(1.2239)

A = 367.17

hence the amount of the car after 5years is $367.17