Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

After graduating from college and securing your first job in your field of study, you need to purchase a new car. You are looking at

After graduating from college and securing your first job in your field of study, you need to purchase a new car. You are looking at a Tesla Model X which is priced at $85000. You are able to make a 5.00% down payment at signing and will finance the remaining balance with a 4 year loan. If the interest rate is 5.25%, what is the monthly payment, assuming you'll make the car payment at the end of every month. hint: Loan problems use the present value of an annuity formula. In this case, the present value of the loan is the amount you will finance. Since the car costs $85000 and you will make a 5.00% down payment, the present value of the loan is $80750. Now use the PV of annuity formula to solve for the annuity. Also note that this is a monthly payment so the rate should be divided by 12 and the n should be multiplied by 12.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Handbook Of Pairs Trading

Authors: Douglas S. Ehrman

1st Edition

0471727075, 9780471727071

More Books

Students also viewed these Finance questions

Question

5. Structure your speech to make it easy to listen to

Answered: 1 week ago

Question

1. Describe the goals of informative speaking

Answered: 1 week ago