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?

1 Answer
Jul 4, 2016

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