You want to buy a $35,000 car. The company is offering a 4% interest rate for 60 months (5 years). What will your monthly payments be?

To calculate the monthly payment for a car loan, we can use the formula for the monthly payment on a fixed-rate 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 ($35,000)
- $ r $ is the monthly interest rate (annual rate of 4% divided by 12 months = 0.04/12)
- $ n $ is the total number of payments (5 years × 12 months = 60 months)

Now let's plug in the values and calculate the monthly payment.The monthly payment for the $35,000 car at a 4% interest rate over 60 months (5 years) will be approximately **$644.58**.

Would you like further details or clarifications on how this was calculated?

Here are some related questions to deepen your understanding:
1. What would the monthly payment be if the interest rate were 5% instead of 4%?
2. How much total interest will you pay over the 5 years?
3. What happens to the monthly payment if you choose a 6-year loan instead of 5 years?
4. How much principal will you have paid off after 3 years?
5. How does the down payment amount affect the monthly payment?

**Tip:** Always try to pay extra towards the principal to reduce the total interest paid over the life of the loan.

Learn how to calculate the monthly payments for a $35,000 car loan with a 4% interest rate over 60 months. This problem covers key concepts like loan amortization, interest rate calculations, and monthly payment formulas. Suitable for high school students or anyone learning about financial math.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation