SOLUTION: You can afford a $250 per month car payment. You've found a 5 year loan at 7% interest. How big of a loan can you afford?

Question 1135586: You can afford a $250 per month car payment. You've found a 5 year loan at 7% interest. How big of a loan can you afford?
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
using the following calculator, i get a car loan of $12,625.50 as possible.

inputs to the calculator are:

present value = 0
future value = 0
number of months = 5 * 12 = 60
interest rate percent per month = 7/12 = .583333333......
payment per month = 250 (shown as negative because it's money going out)
payment are made at the end of each month.

once you click on PV, the calculator gives you the present value of the loan.

the calculator can be found at https://arachnoid.com/finance/

here's a display of the results.

$$$

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