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Britney wants to purchase a sport car for $69 000. She planned to make a $5000...

Britney wants to purchase a sport car for $69 000. She planned to make a $5000 downpayment and then finance the remaining amount with a loan at 9%/a, compounded monthly. If the loan is 7 year term, her monthly payment is? ( Answer is supposed to be $1030)
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Answer #1

Loan amount = price-downpayment = 69000-5000=64000

PVOrdinary Annuity = C*[(1-(1+i/100)^(-n))/(i/100)]
C = Cash flow per period
i = interest rate
n = number of payments
64000= Cash Flow*((1-(1+ 9/1200)^(-7*12))/(9/1200))
Cash Flow = 1029.7
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