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Duane decided to purchase a $31,000 MSRP vehicle at a 5.5% interest rate for
5 years. The dealership offered him a $4500 cash-back incentive, which he
accepted. Taking all these factors into consideration, what monthly payment
amount can he expect?

A. $592.14

B. $517.39

C. $506.18

D. $442.28

Respuesta :

Answer:

(C)[tex]\$506.18[/tex]

Step-by-step explanation:

Manufacturer's Suggested Retail Price = $31,000

CashBack = $4500

Amount Financed = $31,000-4500 =$26500

Interest rate Per Annum =5.5%

Rate Per Period (Monthly), r [tex]=\frac{5.5}{12}\%=\frac{0.055}{12}[/tex]

Time =5 Years

Number of Periods, n=5 X 12=60 Months

[tex]Monthly \:Payment=\dfrac{rP}{1-(1+r)^{-n}}[/tex]

[tex]=\dfrac{\frac{0.055}{12}*26500}{1-(1+\frac{0.055}{12})^{-60}}\\=\$506.18[/tex]

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