SOLUTION: Maxwell buys a used car by paying a down payment of $5,000 and instalment of $850 a month for 3 years. The first instalment is paid one month after the time of purchase. If the int
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Question 1185062: Maxwell buys a used car by paying a down payment of $5,000 and instalment of $850 a month for 3 years. The first instalment is paid one month after the time of purchase. If the interest rate is 9% per year compounded monthly, find the purchase price of the used car Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website! down payment is 5000
payments are 850 a month for 3 years.
payments are at the end of each month.
interest rate is 9% per year compounded monthly.
the monthly interest rate is 9/12 = .75%
the number of time periods of the loan is 36 months.
the end of each month payment is 850.
you are looking for the present value of the loan.
using the calculator at , the present value of the loan is 26,729.78.
add 5000 down payment to that and the price of the car is 31,729.78.
inputs to loan calculator.
output from loan calculator.
this can also be done by formula.
the formula used is in the link.
if you need assistance with how to use the formula, let me know.
