Math Problem Statement
Philip buys a new car at the price of $32500, where he makes 20% down payment and finances the remaining balance at the interest rate of 6% compounded monthly. The loan will be amortized (paid back) with 48 monthly payments. How much does Philip have to pay back each month?
Solution
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Math Problem Analysis
Mathematical Concepts
Financial Mathematics
Loan Amortization
Compound Interest
Formulas
Monthly Payment Formula for Amortized Loan: M = (P * r * (1 + r)^n) / ((1 + r)^n - 1)
Compound Interest Rate Calculation: r = annual interest rate / 12
Theorems
Amortization Formula
Suitable Grade Level
Grades 11-12
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