You are considering purchasing a new automobile with the upfront cost of $25,000 or leasing it from the dealer for a period of 60 months. The dealer offers you 4.00% APR financing for 60 months (with payments made at the end of the month). Assuming you finance the entire $25,000 through the dealer, your monthly payments will be closest to ________.
A) $368
B) $460
C) $552
D) $645

Question

Quizplus · Accepted Answer

B) First we need the monthly interest 11ea84dc_f574_b7da_9a63_bb33da02a74f_TB1316_11_TB1316_11 or 0.3333%.
Now:
PV =$25,000
I = 0.3333
FV = 0
N = 60
Compute PMT = $460.41

You Are Considering Purchasing a New Automobile with the Upfront