Question

given a 60 month car loan at 4.71%, explain how much your monthly payments would be for a $18,400 car and what your TOTAL COST would be given that interest.

Answer 1

$23161.10

Explanation:

Assuming this is compounded annually, we use our simple interest rate formula: A = P(1 + r)^t

Step 1: Convert months to years

60 months/12 month/year = 5 years

Step 2: Plug in known variables

A = 18400(1 + 0.0471)^5

Step 3: Solve

When you plug step 2 into your calc you should get 23161.1 as your answer. I am assuming that this isn't compounded quarterly or monthly, but just yearly.