Question

You have $15,650 outstanding on a car loan. The loan has monthly payments with an 8% APR. If your monthly payment is $701.30, how much will be outstanding on the loan after your next monthly payment

Answer 1

Answer: $15,053.03

Explanation:

First we need to convert the APR to a monthly figure because the interest is being paid per month.

= 8%/12

= 0.00666667

To calculate the loan after the next payment would then be as follows taking into account the increase in the cost per month because of the APR,

= 15,650 x (1+0.00666667) - 701.3

= $15,053.03

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