Paige pays $532 per month for 5 years for a car. she made a down payment of $3,700.00. if the loan costs 7.1% per year compounded monthly, what was the cash price of the car?

Question

Mathematics

Makayla Greene

18 September, 21:15

Paige pays $532 per month for 5 years for a car. she made a down payment of $3,700.00. if the loan costs 7.1% per year compounded monthly, what was the cash price of the car?

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Answers (1)

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Claire · Answer 1

Use the formula of the present value of annuity ordinary which is

Pv=pmt [ (1 - (1+r/k) ^ (-kn)) : (r/k) ]

Pv present value?

PMT monthly payment 532

R interest rate 0.071

K compounded monthly 12

N time 5years

Pv=532 * ((1 - (1+0.071:12) ^ (-12

*5)) : (0.071:12))

=26,803.15

So the cash price of the car including down payment is

26,803.15+3,700

=30,503.15 ... answer