math homework APR

Question

Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those presented here. For long-term loans, the differences may be pronounced.

To buy a car, you borrow $23,000 with a term of five years at an APR of 6%. What is your monthly payment? (Round your answer to the nearest cent.)

$ 

How much total interest is paid? (Round your answer to the nearest cent.)

$ al

Answer 1

p = r(V) / (1 + (1 + r)^-n)

p = 0.06(23000) / (1 + 1.06^-60)

p = 1380 / 1 +0.030314337)

p = 1380 / 1.030314337

p = 1339.619358

To get total payment, multiply by 60.

To get interest paid subtract 23000 from the total payment.