Larry want to take out a loan to buy a new car for which you need to finance $26118 Your bank will give you a loan at 4 compunded monthly You look at your budget and decide that you can afford a patment of $295 a month How many years to the nearest tenth of a year must the loan be taken out to meet the conditions How much interest is paid over the life of the loan.

Question

anonymous · Answer

please help. thanks.

anonymous · Answer

You missed a few words in between which is confusing me!!! Fill them please

anonymous · Answer

* at 4% compounded monthly.

anonymous · Answer

@hartnn

anonymous · Answer

@CliffSedge

anonymous · Answer

please help.

anonymous · Answer

I need to go to bed, sorry.
Start with A=P(1+i/n)^nt and go from there.

anonymous · Answer

but, that is for future value of compound interest, here, we have a monthly payments given..

anonymous · Answer

It seems like with 4% of $26118 compounded monthly, you can never clear the loan with the monthly budget of $295

anonymous · Answer

there is no year given, we will solve for it, i am wondering how?

anonymous · Answer

i am thinking, multiply $295 by 12, $3540, then, divide the $26,118 by $3540?

anonymous · Answer

i get it, thanks anyway. :)

anonymous · Answer

How did you solve it? Let me know plz

anonymous · Answer

@violy ...?

anonymous · Answer

it is using the formula: n = -ln(1-iPV/PMT)/(ln(1+i)).

anonymous · Answer

then, i divided the result by 12.

anonymous · Answer

Okay..