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Sagot :
Given:
Cost of a new car = $32,600
Trade-in old car cost = $5,000
Rate, r = 5% or 0.05
Time, t = 4 years
Asked: Find the monthly payment.
Solution:
[tex]PMT=\frac{P_O(\frac{r}{n})}{(1-(1+\frac{r}{n})^{-nt})}[/tex]where:
PMT = Loan Payment
Po = Loan Amount
r = Annual Interest Rate
n = Number of Compounds per year
t = Length of the Loan in years
Now that we have the formula, we will substitute the values.
Po = $32,600 - $5,000 = $27,600
r = 5% or 0.05
n = 12 (There are 12 months in 1 year)
t = 4 years
[tex]\begin{gathered} PMT=\frac{P_O(\frac{r}{n})}{(1-(1+\frac{r}{n})^{-nt})} \\ PMT=\frac{27600(\frac{0.05}{12})}{(1-(1+\frac{0.05}{12})^{-12\cdot4})} \\ PMT=\frac{115}{(1-0.8190710169^{})} \\ PMT=\frac{115}{0.1809289831} \\ PMT=635.6085026 \end{gathered}[/tex]ANSWER:
The monthly payment is $636. (Rounded to the nearest cent.)
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