SOLUTION: Question #1 Find the amount of interest and the monthly payment of the loan. Purchase a car for $42,400 at 2.4% add-on rate for 5 years. (Round your answers to the nearest cent).

Question 581630: Question #1
Find the amount of interest and the monthly payment of the loan. Purchase a car for $42,400 at 2.4% add-on rate for 5 years. (Round your answers to the nearest cent).
My answers were incorrect Interest: $1746
Per month: $394.88
Question #2
find the ending balance in an account that opens with $3,940, earns 9.5% interest compounded monthly, and is held for 10 years. (round your answer to the nearest cent)
My answer was incorrect: $10149

Answer by jim_thompson5910(35256) (Show Source): You can put this solution on YOUR website!
# 1
The total interest added on is 42400*0.024*5 = 5088 dollars

So the total amount to pay back is 42400 + 5088 = 47488

Divide this among 60 months (note: 5 yrs = 12*5 = 60 months) to get

47488/60 = 791.47

So the monthly payment is 791.47 dollars.
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# 2
A = P(1 + r/n)^(nt)

A = 3940(1 + 0.095/12)^(12*10)

A = 10149.66

So your answer was very close, you just forgot the 66 cents.
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