Jerry's new car has a list price of $22,415. The sales tax in Jerry's state is 8.75%, and he is responsible for a $1,925 vehicle licensing fee and a $79 documentation fee. Jerry plans to make a down payment of $3,000 and finance the rest at an interest rate of 10.86%, compounded monthly. If Jerry's financing plan spans three years, what will his monthly payment be?

Question

Mathematics

Jovani Rich

14 March, 15:02

Jerry's new car has a list price of $22,415. The sales tax in Jerry's state is 8.75%, and he is responsible for a $1,925 vehicle licensing fee and a $79 documentation fee. Jerry plans to make a down payment of $3,000 and finance the rest at an interest rate of 10.86%, compounded monthly. If Jerry's financing plan spans three years, what will his monthly payment be?

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Answers (1)

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Laney Pitts · Answer 1

Given:

list price = 22,415

sales tax = 8.75%

vehicle license fee = 1,925

documentation fee = 79

down payment = 3,000

finance the rest at 10.86% compounded monthly for 3 years.

22,415 x 1.0875 = 24,376.31

24,376.31 + 1,925 + 79 = 26,380.31

26,380.31 - 3,000 = 23,380.31

I used an auto loan calculator and inputted the required info.

It gave the answer of 763.88 monthly payment.

When you do manual calculation, you use this formula.

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

A = monthly payment

P = pricipal

r = interest rate per month

n = total number of months