Above is a walk through of the formula

You want to buy a car, and a local bank will lend you $40,000. The loan will be fully amortized over 5 years ( 60 months), and the nominal interest rate will be 6% with interes paid monthly. What will be the monthly loan payment? What will be the loan's EAR? Do not round intermediate calculations. Round your answer for the monthly loan payment to the nearest cent and for EAR to two decimal places. Monthly loan payment: $ EAR: % LOAN AMORTIZATION AND EAR You want to buy a car, and a local bank will lend you $40,000. The loan will be fully amortized over 5 years ( 60 months), and the nominal interest rate will be 8% with interest paid monthly. What will bethe monthly loan payment? What will be the loan's EAR? N=60PV=40,000 pmT ? EAR=(1+IPER)m1PmT=49.318440,000+12811.06=(1+120.08)121=(1.00667)121=1.08299951EAR=0.0829995or28.3%