You buy a car for $38,000. You agree to a 60-month loan with a monthly interest rate of 0.55 percent. What is your required monthly payment?

$634.24

$745.29

$605.54

$788.44

To calculate the required monthly payment for a car loan, we can use the formula for the monthly payment of an amortizing 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 (the price of the car),
- $r$ is the monthly interest rate,
- $n$ is the total number of payments (loan term in months).

In this case:
- $P = 38,000$,
- $r = 0.55\% = 0.0055$,
- $n = 60$ months.

Let me compute the monthly payment.The required monthly payment for the car loan is approximately **$745.29**.

Would you like more details or have any questions? Here are 5 related questions you might find helpful:

1. How does the loan term affect the monthly payment amount?
2. What is the total interest paid over the life of this loan?
3. How would the monthly payment change if the interest rate were reduced?
4. How is the loan amortization schedule calculated?
5. What happens if additional payments are made toward the loan?

**Tip:** Always consider the total cost of the loan, including interest, when evaluating financing options!

You buy a car for $38,000. You agree to a 60-month loan with a monthly interest rate of 0.55 percent. What is your required monthly payment?

Learn how to calculate the monthly payment for a $38,000 car loan with a 60-month term and a 0.55% monthly interest rate. This guide explains the loan amortization formula, covering key concepts in algebra and interest rates. Ideal for Grades 10-12.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation