SOLUTION: Consumer Debt 11. Suppose you want to buy a car. The dealer offers a financial package consisting of 6% APR compounded monthly for a term of five years. Suppose that you want

Question 1041193: Consumer Debt
11. Suppose you want to buy a car. The dealer offers a financial package consisting of 6% APR compounded monthly for a term of five years. Suppose that you want your monthly payments to be at most $320. What is the maximum amount you should finance? Give your answer to the nearest dollar.

Answer by addingup(3677) (Show Source): You can put this solution on YOUR website!
5*12 = 60 5 years equals 60 months. And you make a monthly payment of $320:
320*60 = 19,200
:
PV = 19,200/[(1+(0.06/12))^(12*5)] = 14,234.35 is what you should finance
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