RatedrillCar loan payment
A time value of money problem from Ratedrill. Solve it with one answer box, with fresh numbers on every attempt and the formula, calculator keystrokes and Excel version in the worked answer, and it is checked the moment you submit.
The task
A car costs $18,000. You pay $1,000 down and finance the rest over 60 months at 10% APR. What is the monthly payment?
What this problem teaches
The formula: PMT = L × i / (1 - (1 + i)^-n). Set P/Y = C/Y = 1, so I/Y is the rate per period. Cash you pay out is negative and cash you receive is positive.
A hint if you get stuck
Finance price minus down payment, at APR / 12 per month, for the stated number of months.
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