Question

You want to buy a new sports car from muscle motors for $48,000. the contract is in the form of a 72-month annuity "due" at a 8.25 percent apr. required: what will your monthly payment be?

Answer 1

Use the formula of the present value of an annuity due which is
Pv=pmt [(1-(1+r/k)^(-n))÷(r/k)]×(1+r/k)
Pv present value 48000
PMT monthly payment?
R interest rate 0.0825
K compounded monthly 12
N time 72 months
Solve the formula for PMT
PMT=pv÷[[(1-(1+r/k)^(-n))÷(r/k)]×(1+r/k)]
PMT=48,000÷(((1−(1+0.0825÷12)^(
−72))÷(0.0825÷12))×(1+0.0825÷12))
PMT=841.68. ..Answer

Hope it helps!