Jackie wants to buy a $25,000 car, but she can afford to pay only $400 per month for 5 years. If the interest rate is 8.25% compounded month

Question

Jackie wants to buy a $25,000 car, but she can afford to pay only $400 per month for 5 years. If the interest rate is 8.25% compounded monthly, how much does she need to put down?

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Thiên Ân 4 years 2021-08-28T00:41:46+00:00 1 Answers 5 views 0

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  1. yenoanh
    0
    2021-08-28T00:43:23+00:00
    Reply

    Answer:

    A down payment of $5,388.50  to get the principle to $19611.50  for a monthly payment of $400 for 60 months at 8.25%

    Step-by-step explanation:

    I used a payment calculator

    I don’t know how else to solve the problem.  I thought I could find the equation, but I don’t think this is it, since P didn’t equal 19611.50

    A = P[r(1+r)n] / [(1+r)n – 1]    

    if you have the correct formula follow this process

    A = 400        P principle ???    r = i%/12 = 0.0825/12 =  0.006875    n= 5×12 = 60

         solve for P      then    down payment = 25000 – P

     P = A / [r(1+r)n] / [(1+r)n – 1]    

        = A [(1+r)n – 1]  /  [r(1+r)n]

        =  400 [(1 +.006875)60 -1]  /  [0.006875( 1 +0.006875)60]

         

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