Math Problem Statement

You can afford a $300 per month car payment. You've found a 5 year loan at 6% interest. How big of a loan can you afford?

Solution

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Math Problem Analysis

Mathematical Concepts

Annuities
Loan Amortization
Present Value

Formulas

Present value of an ordinary annuity formula: PV = PMT × (1 - (1 + r)^(-n)) / r

Theorems

Annuity Present Value Theorem

Suitable Grade Level

Grades 10-12