Math
posted by SSS on .
I'm having a bit of trouble with the following problem. Thanks!
Kevin bought a new car for $22,000. He made a down payment of $5,500 and has monthly payments of $406.69 for 4 years. He is able to pay off his loan at the end of 30 months. Using the actuarial method, find the unearned interest and payoff amount.

balance owing = 220005500 = 16500
We don't know the rate, but
if the monthly rate is i , then
16500 = 406.69(1  (1+i)^48)/i
Did some alternate numerical calculations and found
n = .007083333..
which makes it an annual rate of 8.5% compounded monthly
So balance owing after 30 months
= 16500(1.00708333..)^30  406.69(1  1.00708333^30)/.007083333..
= $9434.63
Can you take it from there ?