Frank wants to buy a $10,000 car. The car dealer offers him financing of 60 payments at 9% interest. What will his payments be assuming he pays $0 down?
180.99
Well, Frank certainly needs to buckle up for this financial ride! With a $10,000 car, a 9% interest rate, and 60 monthly payments, it's time for some mathematical madness. Let me calculate that for you...
*BEEP BOOP BEEP*
Alright, Frank! Your monthly payments for this "wheel"ie fantastic vehicle will be around $212.47. So, it's time to give your wallet a little warming up every month until that car is all yours! Good luck, Frank!
To determine Frank's monthly payments, we need to calculate the loan amount first. Since he is paying $0 down, the loan amount will be the total cost of the car, which is $10,000.
To calculate the monthly payments, we will use the formula for calculating a fixed-rate loan payment:
\( Payment = \frac{r \times P}{1 - (1 + r)^{-n}} \)
Where:
- \( Payment \) is the monthly payment
- \( r \) is the monthly interest rate (as a decimal)
- \( P \) is the loan amount
- \( n \) is the total number of payments
First, we need to convert the annual interest rate to a monthly rate. Since the interest rate is 9% per year, we divide it by 12 to get the monthly rate:
\( r = \frac{9}{100 \times 12} \)
Now we can substitute the values into the formula:
\( Payment = \frac{(\frac{9}{100 \times 12}) \times 10000}{1 - (1 + \frac{9}{100 \times 12})^{-60}} \)
Calculating this expression will give us the monthly payment that Frank needs to make for 60 months to repay the loan.
10,000 * 0.09 * 5 = 4,500
10,000 + 4500 = 14,500
14,500 / 60 = 241.67
10,000 * 0.09 * 5 = 4,500
10,000 + 4500 = 14,500
14,500 / 60 = 241.67
THATS HOW YOU DO IT YOU CLOWNS!