You borrow $21,000 to purchase a car and plan to make monthly payments for the life of the loan which is 6 years. The interest rate on the loan is 11%.
A) Find the monthly payment
B) How much total interest will you pay?- Hint: it is not (21000)(.11)(6)

Question

You borrow $21,000 to purchase a car and plan to make monthly payments for the life of the loan which is 6 years. The interest rate on the loan is 11%. 
A) Find the monthly payment
B) How much total interest will you pay?- Hint: it is not (21000)(.11)(6)

dumbcow · Answer

do you have to do it by hand?
use a financial or loan calculator

anonymous · Answer

algebraically yes, it needs to be done by hand.

anonymous · Answer

So, I have the answer now. 
you solve it by plugging in numbers to this equation$$21000=d \left[\begin{matrix}(1-(1+.11/12)^{(12\times6)})\(.11/12)\end{matrix}\right]$$
What was confusing me I realize now, was that I wasn't thinking that the loan was being compounded monthly, but I realized the question is implying that it is compounded monthly, hence the monthly payments. Any similar problem can be solved this way.

anonymous · Answer

and on this particular problem we are solving for d, for the second part you multiply the result (what you got when you solve for D) and multiply that (12)then(6), just to be clear, because it is compounded 12 months a year for 6 years. Then from that result you can subtract the 21000 you originally borrowed, and that is the answer to part B