You want to buy a new sports coupe for $93,500, and the finance office at the de
ID: 2749231 • Letter: Y
Question
You want to buy a new sports coupe for $93,500, and the finance office at the dealership has quoted you an APR of 7.5 percent for a 48 month loan to buy the car.
What will your monthly payments be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is the effective annual rate on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
You want to buy a new sports coupe for $93,500, and the finance office at the dealership has quoted you an APR of 7.5 percent for a 48 month loan to buy the car.
Explanation / Answer
EMI = [P×r×(1+r)^n]÷[(1+r)^n-1]
P is Principal payable
r is interest rate per period
n is number of payments
= [$93,500×(7.5%÷12)×(1+(7.5%÷12))^48]÷[(1+(7.5%÷12))^48-1]
= $2,260.73
Effective annual rate:
= (1+(7.5%÷12))^12-1
= 7.76%
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.