Question

Caleb bought a car $6,900. He agreed on a five-year loan at a 5.4% interest rate. What will Caleb's monthly payments be?

Answer 1

Caleb's monthly payment will be >= `$131.48`

Explanation:

Monthly payment EMI is calculated as `[P * R * (1+R)^N]/[(1+R)^N-1]`

`P = 6900`

`R = .054/12` = `.0045`

`N = 5*12 = 60`

EMI = `6900*0.0045*(1.0045^60)/(1.0045^60 -1 )`

= `131.48`