The amount to be financed on a new car is $9,500. The terms are 11% for 4 years. What is the monthly payment?

(a) State the type.
future value
ordinary annuity
present value
amortization
sinking fund

(b) Answer the question. (Round your answer to the nearest cent.)
$

To calculate the monthly payment for a loan, you should use the formula for an ordinary annuity.

The formula for calculating the payment on an ordinary annuity is:

\[ P = \frac{A \times i}{1 - (1 + i)^{-n}} \]

Where:
P = Monthly payment
A = Amount to be financed
i = Interest rate (per period)
n = Number of periods

In this case, the amount to be financed is $9,500, the interest rate is 11% (converted to a decimal would be 0.11), and the term is 4 years. Since the term is in years and we need the interest rate per period, we should divide the interest rate by the number of periods per year. Assuming there are 12 months in a year, we get:

\[ i = \frac{0.11}{12} \]

Now we can substitute the values into the formula:

\[ P = \frac{9500 \times \frac{0.11}{12}}{1 - (1 + \frac{0.11}{12})^{-4 \times 12}} \]

After calculating this equation, the monthly payment for the car loan will be the closest rounded answer.