Answer:
- The monthly payment for this car loan is approximately $381.45.
Step-by-step explanation:
To calculate the interest charge, total cost, and monthly payment for a car loan with a 6-year term and an interest rate of 8.32%, we need to consider the principal amount, the interest rate, and the loan term.
1. Principal Amount:
The principal amount is the initial cost of the car, which is $23,521.
2. Interest Rate:
The interest rate is 8.32%. This rate represents the annual percentage rate (APR) at which interest will be charged on the loan.
3. Loan Term:
The loan term is 6 years, which means you have 72 monthly payments to make.
Now let's calculate each component:
Interest Charge:
The interest charge is the additional amount you will pay on top of the principal amount over the course of the loan. To calculate this, we can use the formula: Interest Charge = Principal Amount * Interest Rate.
Interest Charge = $23,521 * 0.0832 = $1,957.51
Therefore, the interest charge for this car loan is $1,957.51.
Total Cost:
The total cost includes both the principal amount and the interest charge. To calculate this, we can use the formula: Total Cost = Principal Amount + Interest Charge.
Total Cost = $23,521 + $1,957.51 = $25,478.51
Therefore, the total cost of this car loan is $25,478.51.
Monthly Payment:
To calculate the monthly payment, we need to consider both the principal amount and the interest charge over the loan term. One common formula used to calculate monthly payments is called the amortization formula:
Monthly Payment = (Principal Amount + (Principal Amount * Monthly Interest Rate)) / Number of Payments
Where Monthly Interest Rate = Annual Interest Rate / Number of Months in a Year
In this case:
Monthly Interest Rate = 8.32% / 12 = 0.0069333 (approx.)
Monthly Payment = ($23,521 + ($23,521 * 0.0069333)) / 72
Monthly Payment = $381.45 (approx.)
Therefore, the monthly payment for this car loan is approximately $381.45.
In summary:
- The interest charge for a 6-year car loan with an interest rate of 8.32% is $1,957.51.
- The total cost of the car loan, including the principal amount and interest charge, is $25,478.51.