Don James purchased a new automobile for $28,000. Don made a cash down payment of $7,000 and agreed to pay the remaining balance in 30 monthly installments, beginning one month from the date of purchase. Financing is available at a 24% annual interest rate. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor (s) from the tables provided.) Required: Calculate the amount of the required monthly payment.

Question

Business

Marilyn Martin

27 June, 07:02

Don James purchased a new automobile for $28,000. Don made a cash down payment of $7,000 and agreed to pay the remaining balance in 30 monthly installments, beginning one month from the date of purchase. Financing is available at a 24% annual interest rate. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor (s) from the tables provided.) Required: Calculate the amount of the required monthly payment.

+5

Answers (1)

Know the Answer?

Zariah Rosario · Answer 1

monthly Payment = $937.65

Explanation:

Given that Don bought a new automobile for $28,000 and that Don made a cash down payment of $7,000 also and agreed to pay the remaining balance in 30 monthly installments. We know that the Loan Amount = 28,000 - 7,000 = $21,000. Now we need to calculating Monthly Payment on Loan by Using TVM Calculation,

We have

PMT = [PV = 21,000, FV = 0, N = 30, I = 0.24/12]

PMT = $937.65

Therefore, the monthly Payment = $937.65