Example : You want to buy a $18,500 car. The company is offering a 3% interest rate for 4 years.

What will your monthly payments be?

I will do this one for you and show you how I want you to describe your formula/inputs in excel if that is how you choose to go about solving problems 2 through 5 - which I strongly recommend. If you choose to perform the calculations by hand show the formula used with values.

Excel:

Formula used: PMT

Rate input: .03/12

NPer input: 4*12

Pv input: 18500

Answer : $409.49 per month

1. You want to buy a $22,500 car. The company is offering a 4% interest rate for 5 years.
2. 1. What will your monthly payments be? Round to the nearest cent.
   2. Assuming you pay that monthly amount for the entire 5 years, what is the total amount of money you will pay during those 5 years for the car?
   3. How much interest will you pay during those 5 years?