You want to buy a $19,000 car. You can make a 10% down payment, and will finance the balance with a 3% interest rate for 60 months (5 years). What will your monthly payments be?

To calculate the monthly payments for the car, we can break it down into the following steps:

### 1. **Down Payment**
You will make a 10% down payment on the car, so:
\[
\text{Down Payment} = 0.10 \times 19,000 = 1,900
\]

### 2. **Loan Amount**
The remaining balance to finance after the down payment will be:
\[
\text{Loan Amount} = 19,000 - 1,900 = 17,100
\]

### 3. **Monthly Interest Rate**
The interest rate is 3% per year, so the monthly interest rate is:
\[
\text{Monthly Interest Rate} = \frac{3\%}{12} = 0.0025
\]

### 4. **Loan Term**
The loan term is 60 months (5 years).

### 5. **Monthly Payment Formula**
We will use the **amortization formula** for fixed monthly payments:

\[
M = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1}
\]
Where:
- $M$ = monthly payment
- $P$ = loan amount = $17,100
- $r$ = monthly interest rate = 0.0025
- $n$ = loan term in months = 60

Now, let’s calculate the monthly payment.Your monthly payment for the car will be approximately **$307.26**.

Would you like further details on how the calculations were done, or do you have any other questions?

Here are 5 related questions to expand your understanding:
1. How much interest will you pay over the life of the loan?
2. What would your monthly payments be if the interest rate increased to 5%?
3. How would a shorter loan term (e.g., 36 months) affect your monthly payments?
4. How does the loan amount change if you increase the down payment to 20%?
5. What would happen to your monthly payment if you financed the entire $19,000?

**Tip:** Making a larger down payment reduces the principal amount, which lowers your monthly payments and the total interest paid over the loan term.

Calculate monthly car loan payments for a $19,000 car with a 10% down payment and a 3% interest rate over 60 months. This guide walks through key concepts like down payments, interest rates, and the amortization formula, making it perfect for students in Grades 11-12.

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