Question

Jack purchased a car for $22,000. The bank gave him an annual interest rate of 4.3%. He will make monthly payments for 6 years (or 72 months). Jack followed these steps to determine his approximate monthly payments. Read through the steps, and then choose Jack’s approximate monthly payment from the drop‐down menu.
1.Calculate the interest rate per period.
0.043
12
≈ 0.00358
2.Add 1 to the interest rate per period.
1 + 0.00358 = 1.00358
3. Raise the number calculated in step 2 to the negative power of the number of loan payments to be made, and then subtract this number from 1.
1.00358-(12)(6) = 1.00358-72 ≈ 0.7731
1 − 0.7731 = 0.2269
4. Divide the interest rate per period by the number calculated in step 3.
0.00358
0.2269
≈ 0.0158
5. Multiply the quotient from step 4 by the principal.
Jack’s monthly payment ≈
Complete step 5 to determine Jack's monthly payment for the loan. Round to the nearest cent.

Answer 1

Answer:

347.60

Step-by-step explanation:

Answer 2

Jack’s approximate monthly payment, if he purchased a car for $22,000 with an annual interest rate of 4.3% is $347.6

How to calculate monthly payments on a sum of money?

In order to calculate the monthly payment, we will follow the steps below:

Calculate the interest rate per period

Interest rate per period = 0.043/12

Interest rate per period = 0.00358

Add 1 to the result to have:

Interest rate = 1 + 0.00358
Interest rate = 1.00358

Raise the result to the power of negative 72

R = (1.00358)^-72

R = 0.7731

Required interest rate per period = 1- 0.7731 = 0.2269

Divide the interest rate per period by the number calculated in step 3

k = 0.00358/0.2269

k ≈ 0.0158

Determine Jack's monthly payment

Jack's monthly payment = 0.0158 * $22,000.
Jack's monthly payment = $347.6

Hence Jack’s approximate monthly payment, if he purchased a car for $22,000 with an annual interest rate of 4.3% is $347.6

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