SOLUTION: What would your monthly payment be on a $15,000 on a 5 year 2.9% car loan? Show all work

Question 925926: What would your monthly payment be on a $15,000 on a 5 year 2.9% car loan? Show all work

Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
the car loan is 15,000 for 5 years at 2.9% interest.
2.9% is the annual percentage rate.
divide that by 12 and you get a monthly percentage rate of 2.9 / 12.
stick these numbers in your financial calculator.
pv = -15,000
n = 5*12 = 60 months
i = 2.9/12 = .2416666667 percent
fv = 0
the calculator will find the monthly payment for you.
it will tell you that the monthly payment is equal to 268.8643014
round this up to 268.87 because the bank will want you to pay a little over rather than a little under.
that should be your answer.

you can also do this by formula manually.

the following link gives you the formula and also has an online calculator that you can use.

http://www.financeformulas.net/Annuity_Payment_Formula.html

when you use the formula, the interest rate will have to be:
2.9/12/100 = .0024166667

the formula expects rate.
the calculator expects percent.
rate = percent divided by 100.

when you use the calculator, the interest percent will have to be:
2.9/12 = .24166667

the calculator expects percent while the formula expects rate.
rate = percent divided by 100.
percent = rate multiplied by 100.

you should get what i got which is a payment of 268.87 or something very close to that.

n is going to be 60 whether you use the formula or the calculator.
pv is going to be 15000 whether you use the formula or the calculator.

the formula should get you right on if you didn't round the monthly rate.

the calculator rounds your input to 5 decimal places so the answer will be a little different.

the calculator should tell you that the payment is 268.89.

that's pretty close to 268.87 with the difference being caused by rounding.

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