You want to buy a car. The loan amount will be $29,000. The company is offering a 4% interest rate for 60 months (5 years). What will your monthly payments be?

To calculate your monthly car loan payments, we use the formula for monthly payments on an amortized loan:

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

Where:
- $M$ = Monthly payment
- $P$ = Loan amount = $29,000
- $r$ = Monthly interest rate = Annual interest rate / 12 = 4% / 12 = 0.04 / 12 = 0.00333
- $n$ = Number of months = 60 months (5 years)

Now, let's compute the monthly payment.Your monthly payment will be approximately **$534.08**.

Do you need more details or have any questions? Here are 5 related questions you might find useful:

1. What is the total interest paid over the life of the loan?
2. How would the payment change if the interest rate were higher or lower?
3. What if you wanted a shorter or longer loan term, like 3 or 7 years?
4. How does the monthly payment change with a higher down payment?
5. What if extra payments were made each month? How would that affect the total cost?

**Tip:** Making extra payments, even small amounts, can reduce the overall interest paid and shorten the loan term.

Learn how to calculate monthly car loan payments for a $29,000 loan with a 4% interest rate over 60 months. This problem covers key financial concepts such as loan amortization and interest rates, with detailed step-by-step calculations. Suitable for Grades 10-12.

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