You want to buy a car, and a local bank will lend you $20,000. The loan will be fully amortized over 5 years ( 60 months), and the nominal interest rate will be 12% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR?© BrainMass Inc. brainmass.com June 4, 2020, 12:29 am ad1c9bdddf
The monthly loan payment would be such that the present value is equal to the loan amount. The monthly loan payment would be an annuity and so we use the PV ...
The solution explains how to calculate the car loan's monthly payment and EAR