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1 January, 15:35

Andrea is buying a car for $21,450. She will finance $16,450 of it with a 5-year loan at 2.9% APR. What will her monthly auto payment be?

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  1. 1 January, 15:57
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    To solve the problem, use the formula:

    A = P (i (1 + i) ^n) / ((1 + i) ^n - 1)

    where A is the yearly payment

    P is the principal amount of money

    i is the annual percent rate or APR

    n is the number of year

    A = (16,450) (0.029 (1 + 0.029) ^5)) / (1 + 0.029) ^5 - 1)

    A = 3581.68

    and her payment per month is

    m = 3581.68 / 12

    m = $ 298.47 per month
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