SOLUTION: You want to buy a car. The loan amount will be $34,000. A bank is offering a 2% interest rate for 48 months (4 years). What will your monthly payments be?
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-> SOLUTION: You want to buy a car. The loan amount will be $34,000. A bank is offering a 2% interest rate for 48 months (4 years). What will your monthly payments be?
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Question 1157594: You want to buy a car. The loan amount will be $34,000. A bank is offering a 2% interest rate for 48 months (4 years). What will your monthly payments be? Found 3 solutions by Shin123, MathTherapy, math_tutor2020:Answer by Shin123(626) (Show Source):
You can put this solution on YOUR website! Assuming interest is applied every year, you will have to pay back $, which is approximately $36,802.69. So your monthly payments will be $, which is approximately $.
You can put this solution on YOUR website!
You want to buy a car. The loan amount will be $34,000. A bank is offering a 2% interest rate for 48 months (4 years). What will your monthly payments be?
Good Lord! Why do these people continue to come on here with answers to problems they know nothing about!
That's NOT how loans are calculated,so it's NOT $766.72.
You can put this solution on YOUR website!
@Shin123 is unfortunately incorrect.
The expression 34000*(1.02)^4 assumes that the balance isn't decreasing over the 48 months, which is of course the wrong assumption.
The reality is that the balance is steadily decreasing because of the monthly payments (we would hope so or else we'd never be able to pay it off).
The section below shows the proper steps in calculating the monthly payment. You can use a calculator such as this one https://www.calculator.net/loan-calculator.html
to confirm the answer. It also shows a handy amortization table to determine the remaining balance at any given month.
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L = 34,000 = loan amount
i = interest rate per month = 0.02/12
n = number of months = 48
P = monthly payment
P = (L*i)/( 1-(1+i)^(-n) )
P = (34,000*0.02/12)/( 1-(1+0.02/12)^(-48) )
P = 737.634203737557
P = 737.63
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