# maths

If I bought a car at R349000 at 8.75% interest per year and made monthly payments of R5000 per month,what would my total repayment amount be for the car?

1. 👍 0
2. 👎 0
3. 👁 42
1. The missing part is the number of payments.

i = .0875/12 = .00729166...
n = ?
PV = 349000
paym = 5000

5000(1 - 1.007291666..^-n)/.00729166.. = 349000
(1 - 1.007291666..^-n)/.00729166.. = 69.8
(1 - 1.007291666..^-n) = .508958286
.491041713 = 1.007291666..^-n
take logs of both sides:
-n log 1.007291666.. = log .491041713
-n = log .491041713 / log 1.007291666..
n = 97.89

let's make it 98 payments
total repaid = 98(5000) = 490000

(notice it did not come out to exactly 98, but rather 97 full payments of 5000 plus partial payment which would have been close to 5000.
I did a quick calculation, and found that for exactly 98 payments , the payment would have been 4996.32, and then the amount repaid is 98(4996.32) or 489639, a difference of 360.97.
However, the operation of simply multiplying the number of payments by the payment is invalid in actuarial math, since the individual payments are in different "time spots" on your time line. )

1. 👍 0
2. 👎 0
posted by Reiny

## Similar Questions

1. ### Finance

I am borrowing \$ 10,000 for 5 years at 7% . Payments are made on a monthly basis and are determined using the add- on method. 1: How much total interest will I pay on the loan if I held it for the full 5 year term ? 2 : What would

asked by Joyce on May 31, 2014
2. ### finance

I am borrowing \$10,000 for 5 years at 9%. payments, which are made on a monthly basis, are determined using the add-on method. 1. how much total interest will i have to pay on the loan if it is held for the full 5 year term. 2.

asked by denise on November 25, 2013
3. ### Amoritizing Loans

"A woman borrows \$6000 at 9% compounded monthly, which is to be amortized over 3 years in equal monthly payments. For tax purposes, she needs to known the amount of interest paid during each year of the loan. Find the interest

asked by Norah on September 25, 2011
4. ### Math

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

asked by SSS on August 3, 2014
5. ### math

OMG I CAN NOT get this !!!! Purchase price of article = \$495 Down payment = \$50 Number of payments = 36 True annual interest rate = 18% Monthly payment amount = \$ The formula is I= 2YC ________ M(N+1) y = the number of payments

asked by sarah on July 10, 2013
6. ### math

Kate bought a new car priced at \$21,300 with 15% down and the balance in equal payments over 4 years at 7% compounded monthly. Determine the size of the monthly payments? The answer is \$433.65 please show me the steps

asked by Daniel on June 10, 2013
7. ### Math

A problem is listed below. Identify its type. John bought a new house. He made a \$4,500 down payment and financed the rest, \$280,000, through his credit union. The credit union charged him 11% per year compounded monthly for 22

8. ### Math

Maya bought a car for \$15,000. To pay for it, she took a bank add-on interest loan at an annual interest rate of 9%. The loan term is 5 years. How much interest will she pay and what are her monthly payments?

asked by Dee on March 25, 2012
9. ### Math HELP

A new luxury car costs \$80,000. You pay 10% down and amortize the rest with equal monthly payments over a 7-year period. If you pay 9.25% compounded monthly, what is your monthly payment? How much interest will you pay?

asked by Lilian on March 15, 2017
10. ### MATH 123

Darla purchased a new car during a special sales promotion by the manufacturer. She secured a loan from the manufacturer in the amount of \$23,000 at a rate of 4.6%/year compounded monthly. Her bank is now charging 6.2%/year

asked by Anonymous on July 5, 2017

More Similar Questions