SOLUTION: equation for a $15,000 car loan, 36 month, 20% down and installment of $500 a month

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Question 401260: equation for a $15,000 car loan, 36 month, 20% down and installment of $500 a month
Answer by Sarpi(32) About Me  (Show Source):
You can put this solution on YOUR website!
Principal(P)= $15,000
Period of payment(n)= 36mths
Installments(X) = $500
monthly interest rate(r)= ?
20% down payment so the principal or balance of the loan will 15,000-(20%*15000) which is $12,000.
Hence the equation is Present value because you borrow the amount today.
so PV=+X+%2A+%28%281-%281%2Br%29%5E%28-n%29%29%2Fr%29
where Pv is the principal. Therefore solving for the monthly rate will be;
12000=+500+%2A+%28%281-%281%2Br%29%5E%28-36%29%29%2Fr%29