# Finite Math

posted by .

In August 2008, General Motors was offering the choice of a 2.9% loan for 36 months, or \$2000 cash back on the purchase of a \$30,000 Pontiac Grand Prix.

(a) If you take the 2.9% loan offer, how much will your monthly payment be?
\$_________

(b) If you take the \$2000 cash-back offer and can borrow money from your local credit union at 8.1% interest compounded monthly for three years, how much will your monthly payment be?
\$_________

• Finite Math -

Pt = (Po*r*t)/(1-(1+r)^-t).

r = (2.9%/12) / 100% = 0.00242 = Monthly % rate expressed as a decimal.

t = 36 Months.

Pt=(30,000*0.00242*36)/(1-(1.00242)^-36
= \$31,362.03.

a. Monthly = 31,362.03 / 36 = \$871.17.

b. Monthly = \$941.48.
Use same procedure as part a.

## Similar Questions

1. ### SMU

You have just purchased a new warehouse. To finance the purchase, you've arranged for a 30-year mortgage loan for 80 percent of the \$2,300,000 purchase price. The monthly payment on this loan will be \$15,000. Therefore, the APR on …
2. ### math

Liam borrowed a sum of money from his parents as an interest free loan to help him pay college. We know that 6 months into the loan,owned 17,900 and that 15 months into into the loan he owned 14,750. 1. What is the original amount?
3. ### Per Calculus

The Washington family can purchase a new home with an 80,000 loan at 6% interest. If the term of the loan is set up to be 20yrs (240 months), what will be there monthly payment toward this loan. Use formula n=-In(1-A(r/12)I P) ______________ …

you take out a loan for \$20,000 simple interest loan at 4% on August 21 and in 45 days you pay off \$8,000 of the loan. What is your new principal?
5. ### Finance

You have arranged for a loan on your new car that will require the first payment today. The loan is for \$32,000, and the monthly payments are \$620. Required: If the loan will be paid off over the next 60 months, what is the APR of …
6. ### f

You have just purchased a new warehouse. To finance the purchase, youâ€™ve arranged for a 35-year mortgage for 85 percent of the \$3,100,000 purchase price. The monthly payment on this loan will be \$17,200. What is the APR on this loan?
7. ### Math

1. Rishi ram obtained an installment loan for \$3,000.00. He agreed to repay the loan in 6 monthly payments. His monthly payments is \$516.50. What is the APR?
8. ### Math

1. Rishi ram obtained an installment loan for \$3,000.00. He agreed to repay the loan in 6 monthly payments. His monthly payments is \$516.50. What is the APR?
9. ### finance

You have only saved 2,000. You are going to trade in your old car and get a new one. The dealership has offered you 3,000 for your trade, and you have accepted their offer. The car you want to buy costs 23,000 but you talked them down …
10. ### finance

You want to purchase a car. It costs 25,000. You have 3,000 that you have saved up for a down payment. You can go with the 5 year car and 60 month car loan. The car manufacture is offering a special deal on your car. You can get zero …

More Similar Questions