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#