SOLUTION: Sam plans to buy a car for R125 000. He pays a 15% deposit and manages to secure a bank loan for the outstanding amount. The bank charges 12,5% per annum, compounded monthly. Dete

Algebra ->  Customizable Word Problem Solvers  -> Finance -> SOLUTION: Sam plans to buy a car for R125 000. He pays a 15% deposit and manages to secure a bank loan for the outstanding amount. The bank charges 12,5% per annum, compounded monthly. Dete      Log On

Ad: Over 600 Algebra Word Problems at edhelper.com


    

Question 1111447: Sam plans to buy a car for R125 000. He pays a 15% deposit and manages to secure a bank loan for the
outstanding amount. The bank charges 12,5% per annum, compounded monthly. Determine what Sam’s
minimum monthly payment will be if the loan has to be repaid in six years’ time.
[1] R998,17
[2] R2 104,94
[3] R2 476,40
[4] R1 476,69
please pin point the method l can use to get to the right answer. thank you in advance


Found 2 solutions by Boreal, TeachMath:
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
Principal=m(1+(r/n)^n*6-1)divided by (r/n)
106250*(r/n) clears the denominator on the right
1106.77=m(1+(r/n)^72-1)=m(1.1088) round at end
1106.77/1.108=998.17
[1]

Answer by TeachMath(96) About Me  (Show Source):
You can put this solution on YOUR website!
Correct answer: R 2,104.94 (CHOICE 3).
It can never, in a million years be R 998.17, as another has suggested.