A rancher purchased an SUV for $33,714 and made a down payment of 15% of the cost. The balance was financed for 4 years at an annual interest rate of 7%. Find the monthly truck payment.

Question

Mathematics

Kaila Stevenson

27 January, 08:39

A rancher purchased an SUV for $33,714 and made a down payment of 15% of the cost. The balance was financed for 4 years at an annual interest rate of 7%. Find the monthly truck payment.

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Answers (1)

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Brooks Terry · Answer 1

Formula for monthly payment is:

A = P x (r (1+r) ^t) / ((1+r) ^t-1) where P is the amount financed, r is the interest rate divided by 12 and t is the amount of time for the loan in months.

P = 33714 x 0.85 = 28656.90

A = 28656.90 x (0.07/12 (1+0.07/12) ^48) / (1 + 0.07/12) ^48 - 1)

A = $686.23