A vehicle is purchased for $18,000, with a down payment of $6,098. The balance in financed for three years at an annual rate of 7%. Find the monthly car payment.

$367.50

$834.12

$188.29

$555.79

The Present value of an annuity is given by PV = P (1 - (1 + r/t) ^-nt) / (r/t)

where: P is the monthly payment, r is the annual rate = 7% = 0.07, t is the number of periods in one year = 12 and n is the number of years = 3.

18,000 - 6,098 = P (1 - (1 + 0.07/12) ^ - (3 x 12)) / (0.07/12)

11,902 = P (1 - (1 + 0.07/12) ^-36) / (0.07/12)

P = 0.07 (11,902) / 12 (1 - (1 + 0.07/12) ^-36) = 367.50

Therefore, monthly payment = $367.50