Posted by **Amber** on Saturday, May 7, 2011 at 4:35pm.

The price of a new car is $16,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 6%/year compounded monthly. (Round your answers to the nearest cent.)

What monthly payment will she be required to make if the car is financed over a period of 48 mo? Over a period of 72 mo?

What will the interest charges be if she elects the 48-mo plan? The 72-mo plan?

- finite math -
**Damon**, Saturday, May 7, 2011 at 4:51pm
$12,000 loan amount

r = .06/12 = .005

n = 48 or 72

1+r = 1.005

(1+r)^-n = .7871 for n = 48

1 - (1+r)^-n = .2129 for n = 48

payment = loan [ r/(1 -(1+r)^-n ) ]

payment for 48 months = 12,000[.005/.2129]

=$281.82

now you do the 72 months

- finite math -
**Amber**, Saturday, May 7, 2011 at 5:02pm
i got $198.87

what about the interest charges?

- finite math -
**Damon**, Saturday, May 7, 2011 at 5:12pm
LOL

well

12,000/48 = 250 per month with no interest.

you paid 281.82 including the interest at 6% compounded monthly

- finite math -
**Amber**, Saturday, May 7, 2011 at 5:22pm
(281.82-250)*48?

- finite math -
**Damon**, Saturday, May 7, 2011 at 5:34pm
right

- finite math -
**Tommy**, Monday, September 17, 2012 at 1:40pm
Determine the simple interest rate at which will grow to in the months. Round your answer to the nearest tenth of percent

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