You want to buy a car, and a local bank will lend you $25,000. The loan would be

Question

You want to buy a car, and a local bank will lend you $25,000. The loan would be fully amortized over 6 years (72 months), and the nominal interest rate would be 6%, with interest paid monthly. What is the monthly loan payment? Round your answer to the nearest cent. $ What is the loan's EFF%? Round your answer to two decimal places.

Explanation / Answer

=>10000= CF/(1+.005) + CF/(1+.005)^2+------+CF/(1.005)^72 =>10000=CF/.005 * (1-(1/1.005)^72 ) =>CF= $165.72 monthly loan payment =$165.72 loan EFF = (1.005)^12 -1 =6.17%

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.