Monthly Payment for an auto loan

Question

What is Kim's monthly payment for a 5-year auto loan of $26,500 she is financing for her new sports car, at a rate of 7.95%

Answer 1

Payment = [rate * PV] / [1 - (1 + r)^-n]

 

So, given the above, but adjusting for the monthly payments, we get:

 

PMT = [(0.0795/12) * 26,500] / [1 - (1 + 0.0795/12)^-60

 

PMT = [0.00662 * 26500] / [1 - (1.00662)^-60]

 

PMT = $175.5625 / 0.37121 = $472.95

 

So, the monthly payments on her new sports car is:  $472.95