How much will Molly’s monthly payment be using the Bankrate calculator? How much total interest will Molly pay using this plan?
Answer: Molly’s monthly payment by using the Bankrate calculator is $286 per month.
It is given that
The downpayment Molly has = $2500.
Interest rate APR = 1.9%
Cash allowance by dealer = $500
Selling price = $25,495
Loan tenure N= 7 years
Amount of loan needed = 25495-2500-500 = $22495
What is Equated monthly payment(EMI)?
An equated monthly installment (EMI) is a set monthly payment provided by a borrower to a creditor on a set day, each month.
The EMI or monthly payment will be calculated by the following formula,
EMI = (P.(APR)/(12) .(1+(APR)/(12))^N )/((1+(APR)/(12))^N-1 )
Put APR =0.019(decimal value of APR)
N = 7
EMI = $286 per month.
Therefore, Molly’s monthly payment by using the Bankrate calculator is $286 per month.