a car with a sticker price of $42,300 with factory and dealer rebates of $51,000. find the monthly payment if financed at 2.5% add on interest for 60 months

Question

Word problem algebra 

Answer 1

OK, let's assume the rebate is $5,100. The cost of the car, the principal, is $37,200.

 

MP = p[ r + (r / ((1 + r)ⁿ - 1)], where MP = monthly payment, p = principal, r = rate, n = number of payments

 

MP = 37200[0.025 + (0.025 / ((1 + 0.025)⁶⁰ -1 ]

MP = 37200[0.025 + (0.025 / (1.025⁶⁰ - 1)]

MP = 37200[0.025 + (0.025 / (4.4 - 1)]

MP = 37200[0.025 + (0.025 / 3.4)]

MP = 37200[0.025 + 0.00735]

MP = 37200[0.0324]

MP = 1203.53

 

The monthly payment is $1,203.53.

 

Now you know why loan companies have programmed calculators!