00:01
It is said that you decide to buy a car for $29 ,635.
00:05
You save $6 ,000 for a down payment.
00:07
You can get a five -year car loan at 6 .75%.
00:11
We have been given a formula and we need to use it to find the monthly payment and the total interest for the loan.
00:17
So let us find the monthly payment.
00:20
What is the formula? that is p times r over n divided by 1 minus 1 plus r over n to the power of negative.
00:30
N t so what is p p is the total amount of money we need so in this case we have 2 ,900635 and you save $6 ,000 for a down payment so 29635 minus 6 ,000 that's the amount of money we need for the loan and so we end up with 29635 minus 6 ,000 so that will be 23635.
00:57
Then we have r which is the interest rate that is 6 .7 so that's 6 .75 over 100 or 0 .0675.
01:06
We divide this by n.
01:08
And here we have monthly payments.
01:11
There are 12 months in a year, so we need 12 payments in a year, and n will be 12.
01:16
So we just substitute those values over here.
01:19
1 minus 1 plus r divided by n to the power of negative n times t.
01:27
What is t? t will be 5 because we have a 5 year cartilage...