Tasha borrowed $11,000 to purchase a new car at an annual interest rate of 11%. She is to pay it back in equal monthly payments over a 3 year period. What is her monthly payment?
A) $360.13
B) $33.61
C) $100.83
D) $421.06

Question

Quizplus · Accepted Answer

The correct answer is A.The monthly payment can be calculated using the formula:P = (r * PV) / (1 - (1 + r)^(-n))where:P is the monthly paymentr is the monthly interest rate (annual interest rate / 12)PV is the present value of the loann is the number of monthsIn this case, the annual interest rate is 11%, so the monthly interest rate is 11% / 12 = 0.009167. The present value of the loan is $11,000. The number of months is 3 years * 12 months/year = 36 months.Plugging these values into the formula, we get:P = (0.009167 * 11000) / (1 - (1 + 0.009167)^(-36))P = $360.13Therefore, the monthly payment is $360.13.

Tasha Borrowed $11,000 to Purchase a New Car at an Annual