finite math

The price of a new car is $16,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 6%/year compounded monthly. (Round your answers to the nearest cent.)

What monthly payment will she be required to make if the car is financed over a period of 48 mo? Over a period of 72 mo?

What will the interest charges be if she elects the 48-mo plan? The 72-mo plan?

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  1. $12,000 loan amount
    r = .06/12 = .005
    n = 48 or 72
    1+r = 1.005
    (1+r)^-n = .7871 for n = 48
    1 - (1+r)^-n = .2129 for n = 48
    payment = loan [ r/(1 -(1+r)^-n ) ]
    payment for 48 months = 12,000[.005/.2129]
    =$281.82
    now you do the 72 months

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  2. i got $198.87

    what about the interest charges?

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  3. LOL
    well
    12,000/48 = 250 per month with no interest.
    you paid 281.82 including the interest at 6% compounded monthly

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  4. (281.82-250)*48?

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  5. right

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  6. Determine the simple interest rate at which will grow to in the months. Round your answer to the nearest tenth of percent

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