Problem 6-20 Calculating Loan Payments [LO2, 4] You want to buy a new sports cou
ID: 2384330 • Letter: P
Question
Problem 6-20 Calculating Loan Payments [LO2, 4]
You want to buy a new sports coupe for $74,500, and the finance office at the dealership has quoted you an APR of 5.6 percent for a 48 month loan to buy the car.
What will your monthly payments be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is the effective annual rate on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
You want to buy a new sports coupe for $74,500, and the finance office at the dealership has quoted you an APR of 5.6 percent for a 48 month loan to buy the car.
Explanation / Answer
1) Monthly EMI = $1736
2) Effective annual rate =5.746%