Question

Bob Rohrman is offering a 2016 Toyota Camry for $29,000. If you have a $5,000 down payment and are able to borrow the rest at a 2.99% APR on a 48 month loan, how much will your payments be?

Answer 1

Answer:

The monthly payment will be $531.12

Step-by-step explanation:

Consider the provided information.

After paying $5,000 down payment you need to pay:

$29,000-$5,000=$24,000

APR is 2.99% or APR = 0.299%

Therefore, $r=\frac{0.0299}{12}$

n = 48

We can calculate the monthly payment by using the formula:

$P=\frac{r(PV)}{1-(1+r)^{-n}}$

Where P is the monthly payment, PV is the present value, r is the rate per period and n is the number of period.

Substitute the respective values in the above formula we get,

$P=\frac{\frac{0.0299}{12}(24000)}{1-(1+\frac{0.0299}{12})^{-48}}$

$P=\frac{59.8}{0.112593}$

$P\approx531.12$

Hence, the monthly payment will be $531.12