The car's apr is 8%, it will get paid in 5 years, and the value of the car is $18000. I know the answer is $365 but the answer is in parenthesis i don't know why. Can Someone tell me the formula?
2007-03-01 09:18:00 · 2 answers · asked by lolo58414 1 in Business & Finance ➔ Personal Finance
A car loan is just like any other loan.
http://www.bankrate.com/brm/popcalc2.asp
Assuming very general numbers
18000 x 0.08 = $1440 the interest you're paying on it for that year, not taking into account that each time you make a payment, it lowers the interest by a small fraction.
That interest of $1440 divided by 12 months = $120/month in interest.
I'm guessing the following:
$365 - 120 = $245 in your principal amount to your principal balance.
The answer would be $(365) because the "()"'s mean that it's a negative number, or a PAYMENT. They aren't paying YOU to keep the car, you're paying them, so you OWE them $(365).
5 years x 12 months x $365 month = $21900 in total
$21900 - $18000 = In total, $3900 in interest you'll be paying over the 5 years.
2007-03-02 06:42:03 · answer #1 · answered by Fabulously Broke in the City 5 · 0⤊ 0⤋
1
2016-09-26 09:35:16 · answer #2 · answered by Elaine 3 · 0⤊ 0⤋