A customer borrowed a car loan $20,000 at 6% APR for 5 years show me a detailed way to solve equation.
This is the formula you would use to calculate the monthly payments on the car loan:
PV=P{[1 + R]^N - 1.[1 + R]^-N} R^-1}
20,000 = P x {[1+0.06/12]^(5*12) -1 x [1+0.06/12]^-(5*12) x (0.06/12)^-1}
20,000 = P x {[1.005]^60-1 x [1.005]^-60 x (1/0.005)
20,000 = P x 0.348850 x 0.741372 x 200
20,000 = P x 51.72552444
P = 20000 / 51.72552444
P =$386.66 monthly payments on $20,000 car loan @ 6% comp. monthly.
