You are considering purchasing a new automobile with the upfront cost of $26,000 or leasing it from the dealer for a period of 48 months. The dealer offers you 2.80% APR financing for 48 months (with payments made at the end of the month). Assuming you finance the entire $26,000 through the dealer, your monthly payments will be closest to ________.
A) $459
B) $688
C) $573
D) $802

Question

Quizplus · Accepted Answer

C) First we need the monthly interest 11ea84dc_f574_deeb_9a63_29a6e498e55b_TB1316_11_TB1316_11 or 0.2333%.
Now:
PV = $26,000
I = 0.2333
FV = 0
N = 48
Compute PMT = $573.20.

You Are Considering Purchasing a New Automobile with the Upfront