If you take out an auto loan of $5,000 at 6.5% interest for 60 months, what will your monthly payment be? Round your answer to the nearest cent.

To calculate the monthly payment for an auto loan, we can use the formula for the monthly payment of a loan:

\[
M = \frac{P \times r \times (1 + r)^n}{(1 + r)^n - 1}
\]

Where:
- $ M $ is the monthly payment
- $ P $ is the loan amount (principal), which is \$5,000
- $ r $ is the monthly interest rate, calculated as the annual interest rate divided by 12
- $ n $ is the total number of payments (months)

### Step-by-step calculation:

1. **Loan amount (P)**: \$5,000
2. **Annual interest rate**: 6.5% = 0.065
   - Monthly interest rate $ r = \frac{0.065}{12} = 0.005417 $
3. **Number of payments (n)**: 60 months

Now, let's calculate the monthly payment $ M $. 

The monthly payment for the auto loan will be approximately \$97.83.

Would you like more details or have any further questions?

Here are 5 related questions to explore:

1. How much total interest will you pay over the course of the loan?
2. What is the total amount repaid over the 60 months?
3. How does changing the loan term to 48 months affect the monthly payment?
4. What would happen if the interest rate were 5% instead of 6.5%?
5. How much would your monthly payment be if you borrowed \$7,500 instead?

**Tip:** When taking out a loan, consider both the interest rate and loan term, as they greatly affect the total cost of borrowing.

Learn how to calculate the monthly payment for an auto loan of $5,000 at 6.5% interest over 60 months. This step-by-step solution covers key financial concepts like loan amortization and interest rates. Suitable for high school students (Grades 9-12) and anyone interested in personal finance.

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