Question

Sahil makes car payments of $318/month for the next 5 years.

His car loan has an interest rate of 2.6%, discounted monthly.

What was the initial price of the car?

Answer 1

$PV=P\times\frac{1-(1+r)^{-n}}{r}$

PV = present value

P = value of each payment

r = interest rate per period

n = number of periods

$PV=318\times \frac{1-(1+0.026)^{-60}}{0.026}$

$=318 \times 30.21664581$

=$ $9,608.893368$