Monthly payments 2

Suppose you have selected a new car to purchase for $19,500. If we can finance the car over four years at an annual rate of 6.9% compounded monthly, how much will your monthly payments be?

Final Answer:

m =  466.0476 USD

Step-by-step explanation:

$$\begin{gathered} a=19500\text{USD} \\ p=6.9\%=\frac{6.9}{100}=0.069 \\ y=12\text{m} \\ n=4\cdot y=4\cdot 12=48\text{m} \\ r=1+p/y=1+0.069/12\doteq 1.0058 \\ b=1-r^{-n}=1-1.0058^{-48}\doteq 0.2406 \\ m=\frac{(r-1)\cdot a}{b}=\frac{(1.0058-1)\cdot 19500}{0.2406}=466.0476\text{USD} \end{gathered}$$

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