Question

You are going to purchase a new car, but being a responsible consumer means doing a little bit of research first.

First, you find the vehicle you are purchasing and its price.
Vehicle: Chevy Volt
Price: $39,145

Current interest rate: 3%

Using the function A(t) =P(1+r/n)^nt create the function that represents your new car loan that is compounded monthly. The principle will be the price of the vehicle you selected, not how much you are putting down.
@ranga

Answer 1

please help me @ranga

Answer 2

I already have the equation set up but I need your help for something! @ranga

Answer 3

The equation I got was 39145(1+0.03/12)^12t

Answer 4

That is correct. Just need to simplify the number within the parenthesis.

Answer 5

So then it would be be 39145(1.0025)^12T correct?

Answer 6

Yes. \[\Large A=39145(1.0025)^{12t}\]

Answer 7

The Next question asks

Being a smart financial planner, you want to figure out how many months it will be until your principal is paid down to $10,000.00. Solve for t and show all of your work. Note that t will be negative because the number of months will decrease the principal.

Answer 8

@ranga

Answer 9

Set A = 10000 and solve for t.

Answer 10

\[
10,000 = 39,145(1.0025)^{12t}\\
\frac {10,000}{39,145} = (1.0025)^{12t} \\
0.2555 = (1.0025)^{12t} \\
\text{Take logarithm on both sides and solve for t}
\]

Answer 11

For the previous question where the principal is down to $10,000 don't they tell you how much each monthly payment is?

Answer 12

I don't think so but when I solved for t i got -45.546. @ranga

Answer 13

Is that correct?

Answer 14

Oh ok

Answer 15

That answers that question correct?

Answer 16

Yes.

Answer 17

I am having trouble though with the last one.

Answer 18

Lastly, you decide to keep track of your loan four times a month instead of monthly. Solve for the adjusted interest rate. Remember to use the formula A(t)=[(1+r/n^1/c]^cnt where c = 4. When solving for the adjusted interest rate, be sure to set it equal to 1+r/n

Answer 19

So then it would be A(t)=P[1+0.03/12]^1/4(4)(12)t

Answer 20

@ranga

Answer 21

Then i would simplify 1+0.03/12 correct?

Answer 22

I solved it though and got 1.00000144675926

Answer 23

That was the answer I got when I solved.

Answer 24

Is it correct?

Answer 25

@ranga

Answer 26

Can you type this formula A(t)=[(1+r/n^1/c]^cnt using the Equation Editor so it is clearer?

Answer 27

Or post a screenshot / pic of the formula or the whole problem.

Answer 28

ok ill try. thanks

Answer 29

would the answer be for the 3rd question 0.022509321 i didn't round it but this is what i got on the calculator @ranga

Answer 30

?? @ranga

Answer 31

can you please help me ranga

Answer 32

I am not sure I understand the third part of the question and hence I am not able to help with that part.

Answer 33

@radar

Answer 34

@robtobey @Callisto @ganeshie8

Answer 35

My guess is (1+r/n)^(1/c) should be expressed in the form 1 + x/n where x is the adjusted interest rate; r = 0.03, n = 12, c = 4.

Answer 36

Did you ever find this question out?

Answer 37

did you ever get the answer to 3? if so could you help me with it?