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23 December, 10:05

Suppose you want to buy a car. Sale price of the car is $18,427. You can afford to make a down payment of $3,427. The net amount to be financed is $15,000. If the dealer offers 6 year at 6.25% APR (compound monthly), what would the monthly payment be? Choose the one closest to the answer.

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  1. 23 December, 10:10
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    Monthly payment would be $250.37

    Explanation:

    The monthly payment can be determined using excel pmt formula as follows:

    =pmt (rate, nper,-pv, fv)

    rate is the APR of 6.25% per year divided by 12 months in a year

    nper is the number of years the payments would last which is 6 years multiplied by 12 months

    pv is the initial amount of finance which is the net amount of $15,000

    fv is the total amounts to be repaid which is unknown

    =pmt (6.25%/12,6*12,-15000,0) = $ 250.37

    The amount of monthly payment is $250.37
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Home » Business » Suppose you want to buy a car. Sale price of the car is $18,427. You can afford to make a down payment of $3,427. The net amount to be financed is $15,000. If the dealer offers 6 year at 6.
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