Loan repayment question. Please help! (1 Viewer)

[Illest]

A family bought a car for $38000, paying a 10% deposit and taking out a loan for the balance. If the loan is over 5 years with interest of 1.5% monthly, find the amount of each monthly payment.

I'm stuck... I don't understand the deposit part. I tried taking P=38000 x 0.9 and calculating the rest but I got the wrong answer

Someone please help ~

 

[wootwoot1234]

For this question, everything would remain the same except for the loan that is repaid. Since a 10% deposit is payed, the loan will only consist of the balance i.e. 38 000 - 3800 = 34 200.

The amount owing would be $34 200.
Period -> 5 years x monthly interest = 12.
Interest -> 1.5% divided by 12.

Is this question from Maths in Focus? I had the same problem. It was just worded badly. I think the problem is your interest - must be divided by 12.

 

[Illest]

Yep, I tried that, doesn't work though

 

[wootwoot1234]

Yep, I tried that, doesn't work though

Did you divide 1.5% interest by 12? I had the same problem; although it says 1.5% monthly interest, you have to divide by twelve to get right answer. I think it was a typo.

 

[Illest]

Did you divide 1.5% interest by 12? I had the same problem; although it says 1.5% monthly interest, you have to divide by twelve to get right answer. I think it was a typo.

Success! It was a typo. Thank you

 

[Drongoski]

Let $M be the equal monthly repayment and $Ai the amount still owing after the i-th repayment. Loan amount = 0.9 x $38000 = $34200 = $P







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But A₆₀ = 0 (fully paid up after 60 repayments)