To purchase a car, you take out a 7 year loan. The present value (loan amount) of the car is $60,000. The loan charges an interest rate / year of 6.2%. What is the annual payment required by this loan? How much of each year's payment goes to paying interest and how much reducing the principal balance? How much did the car cost you in total? What is the present day value of the last year's payment assuming an inflation rate of 6%