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Calculating the monthly payment amount in the given case

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You want to buy a new car for $20,000, and the finance office at the dealership has quoted you a 9% APR loan for 60 months to buy the car, and your trade-in allowance is $5,000. What will your monthly payment be if the first payment is due at the end of the month?

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Solution Summary

Solution describes the steps to calculate the monthly payments of a mortgage with trade-in allowance. Calculations are carried out with the help of suitable mathematical formulas.

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PV of loan amount=PV=$20,000-$5000=$15,000
Number of periods=n=60 ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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