SOLUTION: You want to buy a $27,000 car. The company is offering a 2% interest rate for 48 months (4 years). What will your monthly payments be?

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Question 1181740: You want to buy a $27,000 car. The company is offering a 2% interest rate for 48 months (4 years). What will your monthly payments be?
Found 2 solutions by ikleyn, math_tutor2020:
Answer by ikleyn(52775) About Me  (Show Source):
You can put this solution on YOUR website!
.

It is the real amount to pay,  27000*(1+0.02*2) = 28080  dollars, divided by 48 months evenly


    28080%2F48 = 585  dollars.    ANSWER

Solved.



Answer by math_tutor2020(3816) About Me  (Show Source):
You can put this solution on YOUR website!

@ikleyn is incorrect because simple interest is not involved.

L = 27,000 = 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 = (27,000*0.02/12)/( 1-(1+0.02/12)^(-48) )
P = 585.768338262178
P = 585.77

You can use a calculator such as this one
https://www.calculator.net/loan-calculator.html
to confirm the answer.


Answer: $585.77