You want to buy a car. The loan amount will be $31,000. The company is offering a 2% interest rate for 36 months (3 years). What will your monthly payments be?

$

To calculate your monthly car loan payment, we can use the formula for calculating monthly payments on an installment loan:

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

Where:
- $ M $ is the monthly payment,
- $ P $ is the loan amount ($31,000),
- $ r $ is the monthly interest rate (annual interest rate divided by 12),
- $ n $ is the total number of payments (loan term in months).

**Given:**
- Loan amount ($ P $) = $31,000,
- Annual interest rate = 2%,
- Loan term = 36 months (3 years).

First, we calculate the monthly interest rate:
\[
r = \frac{2\%}{12} = 0.02 / 12 = 0.0016667
\]

Now, we'll calculate the monthly payment using the formula.

Let's compute this:The monthly payment for the car loan would be approximately **$887.92**.

Would you like more details on how this was calculated or any other clarification?

Here are 5 related questions to explore further:
1. How would the monthly payment change if the loan term increased to 60 months?
2. What would be the total interest paid over the life of the loan?
3. How does the interest rate affect the monthly payment?
4. What happens if you make extra payments on the loan?
5. How does a down payment affect the overall loan?

**Tip:** When negotiating a car loan, even a small change in the interest rate or loan term can significantly impact your monthly payments and total cost. Always compare loan offers!

You want to buy a car. The loan amount will be $31,000. The company is offering a 2% interest rate for 36 months (3 years). What will your monthly payments be?

Learn how to calculate the monthly payment for a $31,000 car loan at 2% interest over a 36-month term. This problem covers key financial math concepts, including interest rates and the loan payment formula. Suitable for students in Grades 10-12 or anyone interested in personal finance.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation