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So you want to finance a car for $4,840. Let’s say we offer you a 4.5% interest rate on a 2-year loan and 6% on a 5-year loan. Enter this info into the calculator to see your monthly and total cost by loan term.

Respuesta :

6% = .6

4840 x .06 = 290.4

290.4+ 4840 = 5130.4

5130.4 ÷ 24 = 213.766666667

$5130.40 is your total cost by loan term.

$213.77 is APPROXIMATELY your monthly total for 2 years.

mickymike92

For the 2 year loan, onthly payments is $211.26 and Total payment is $5070.12.

For the 5 year loan, Monthly payments is $93.57 and Total payment is $5614.21.

What is the monthly total cost of the loan?

Assuming the loan is compounded monthly, the total monthly payment is calculated from the amortization loan formula as follows:

  • [tex]A=\frac{P(i(1+i)^n)}{((1+i)^{n-1})}[/tex]

where:

  • A = monthly payment
  • P = amount borrowed = $6000
  • i = monthly interest
  • n = number of months

Calculating the monthly payment for the 2 year loan:

i = monthly interest = 0.045/12

n = number of months = 2 × 12 = 24 months

[tex]A = \frac{4840(0.045/12 (1 +.045/12)^{24})}{((1 +.045)^{24-1})} = \$211.26[/tex]

Monthly payments = $211.26

Total payment = $5070.12

Calculating the monthly payment for the 5 year loan:

i = monthly interest = 0.06/12

n = number of months = 5 × 12 = 60 months

[tex]A = \frac{4840(0.06/12 (1 +.006/12)^{60})}{((1 +0.06)^{60-1})} = \$93.57[/tex]

Monthly payments = $93.57

Total payment = $5614.21

Therefore, the monthly payments are calculated using the amortization loan formula.

Learn more about loan at: https://brainly.com/question/25696681

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