Answer to Question #55326 in Economics for Antornette Love

Question

Suppose you borrow 30,000 to buy a new car at an annually compounded interest rate of 18% per year compounded monthly. The loan is to be paid back monthly for 3 years (36 payments total). How much will the monthly payment be?

Answer 1

If you borrow 30,000 to buy a new car at an annually compounded interest rate of 18% per year compounded monthly and the loan is to be paid back monthly for 3 years (36 payments total), the monthly payment will be:
MP = 30,000*(1+0.18/12)^36/36 = 1,424.28.