What would a monthly payment be on a purchase of a $11,000 car at 5.9% for

4 years?

A. $257.83

B. - $257.83

c. $250.00

D. $252.50

The correct answer is A. 257.83

Step-by-step explanation:

Let's use the formula for calculating the monthly payment, as follows:

A = P * (r (1+r) ^{n}) / ((1+r) ^{n}-1) }

A = the monthly payment.

P = the principal = $ 11,000

r = the interest rate per month, which equals the annual interest rate divided by 12 = 0.059/12 = 0.0049167

n = the total number of months = 48

Replacing with the real values, we have

A = 11,000 * [0.0049167 * (1 + 0.0049167) ⁴⁸] / (1 + 0.0049167) ⁴⁸ - 1

A = 11,000 * [0.0049167 * 1.265444343 ]/1.265444343 - 1

A = 11,000 * [0.0049167 * 1.265444343 ]/0.265444343

A = 68.43991224 / 0.265444343

A = $ 257.83

The correct answer is A. 257.83