Referring to the last part of the qn: "What will the loan balance be when you trade the car in?" Are we able to use the effective annual rate to derive the present value of annuity for the remaining loan payment? (instead of using the monthly interest rate) ie. by converting the fixed monthly payment amt into the yearly amount and converting the remaining 48 months into 4 years, followed by using the Annuity PV formula

car 6.6 Just a Little Bit Each Month You've recently finished your MBA at the Darnit School. Naturally, you must purchase a new BMW imme- diately. The costs about $21,000. The bank quotes an inter- est rate of 15 percent APR for a 72- month loan with a 10 percent down payment. You plan on trading the car in for a new one in two years. What will your monthly payment be? What is the effective interest rate on the loan? What will the loan balance be when you trade the car in