Question 1139125: A new university graduate determines that she can afford a car payment of R3 500 per month. If the car manufacturer is offering a special 2.1% p.a.financing rate, compounded monthly for 4 years, how much can she borrow and still have a R3 500 monthly payment?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! a financial calculator will help to solve this problem.
one such calculator can be found at https://arachnoid.com/finance/
using this calculator, i have determined that the maximum loan that she can afford with
a maximum payment of 3500 at the end of each month would be equal to 161,002.48.
apparently, R means indian rupee and there are currently 69.4 indian rupees to the dollar.
consequently, 161,002.48 indian rupees are equivalent to 2319.92 us dollars.
here's a display of the results i got using the referenced calculator.
my inputs to the calculator were:
present value = 0
future value = 0
number of time periods = 4 years * 12 months per year = 48 months
payment per month = 3500, shown as negative because it's money going out.
percent interest rate per year = 2.1% / 12 = .175% per month.
payments are made at the end of each month.
i then clicked on pv and the calculator told me that the present value of the loan is equal to 161,002.48, shown as positive because it's money coming in.
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