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You are considering buying a car for $25,100. The car dealership charges 2.99% APR compounded monthly on a 60-month loan. If you can afford a monthly payment of $450.00, how much can you borrow? How much do you need for a down payment? Thank you for help.

 
Guest Nov 10, 2017
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This is the formula you would use to find the amount of loan that you can afford.

PV=P{[1 + R]^N - 1 / [1 + R]^N} / R

PV=450{[1 + 0.0299/12]^60 - 1 / [1 + 0.0299/12]^60} / [0.0299/12]

PV=$450 x                      55.6661234212.........

PV=$25,049.76 - The amount of loan you can afford

$25,100 - $25,049.76 =$50.24 Your down payment on car loan !!.

 
Guest Nov 11, 2017

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