Inez Alexander has a car loan of $425 per month at 5.5% annual interest rate. She would like to pay off the car one year early. About how much will her payoff be

The formula of the present value of annuity ordinary is

Pv=pmt [ (1 - (1+r/k) ^ (-kn)) : (r/k) ]

Pv present value?

PMT monthly payment 425

R interest rate 0.055

K compounded monthly 12

T time 1 year

Pv=425 * ((1 - (1+0.055:12) ^ (

-12)) : (0.055:12))

=4,951.26