Tom plans to purchase a used car for $18,450. The dealership will finance his purchase at 10.5% APR for 48 months. Calculate the amount of Tom's monthly payment if he makes a down payment of $3,450 on the car.
Annuity refers to a series of equal amounts of deposits or payments, which is paid at an interval period of time. Examples of annuity are the monthly home mortgage payment, insurance payment, or monthly pension.
Answer and Explanation: 1
The following equation is the formula on calculating the monthly payments of the car.
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fromChapter 21 / Lesson 15
An annuity is a type of savings account that pays back the investor in the future. Learn the formula used to calculate an annuity's value, and understand the importance of labeling specific numbers to calculate an output over time.