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You want to buy a car, and a local bank will lend you $20,000. The loan would be fully amortized over 6 years (72 months), and the nominal interest rate would be 9%, with interest paid monthly. What is the monthly loan payment? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the loan's EFF%? Do not round intermediate calculations. Round your answer to two decimal places.

Sagot :

abiolataiwo2015

Answer:

1. $360.51

2. 9.38%

Explanation:

1. Calculation for What is the monthly loan payment

Based on the information given we would be

Using TVM financial calculator to find the monthly loan payment

PMT = [PV = $20,000, FV = 0, N = 72 months, I = 0.09/12]

PMT = $360.51

Therefore the monthly loan payment will be $360.51

2. Calculation for the loan's EFF%

EFF%= (1 + 0.09/12)^12 - 1

EFF% = 9.38%

Therefore the loan's EFF% will be 9.38%

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