Posted by Camille on .
Jane made a down payment of 1500 dollars toward the purchase of a car. To pay the balance of the purchase price, she has secured a loan from her bank at the nominal rate of 5.8 percent per year compounded monthly. Under the terms of her finance agreement, she is required to to make payments of 100 dollars per month for 36 months.
a) What is the cash price of the car?
b)How much, in total, will Jane spend on interest charges?
I can't seem to apply the loan payment formula ! Help please? Thanks
Finance Math -
n = 36
i = .058/12 = .0048333... ( store that in calculator's memory)
Present value of her loan
= 100( 1 - (1+.058/12)^-36)/(.058/12)
plus her downpayment of $1500
would give a present value of $4796.91