| webwork / csm m125westmoreland / wbwk 07 / 5 wbwk 07: Problem 5 Previous Probl

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| webwork / csm m125westmoreland / wbwk 07 / 5 wbwk 07: Problem 5 Previous Problem List Next (3 points) Gary purchases a new car that costs 37500 dollars. He makes a down payment of 3000 dollars and the remaining balance will be paid off in 36 equal monthly payments with an interest of 9 percent per year. Find the amount of Gary's monthly payment Answer dollars per month Preview My Answers Submit Answers You have attempted this problem 2 times. Your overall recorded score is 0%, You have unlimited attempts remaining

Explanation / Answer

The formula for calculating EMI is :

EMI = P * r* [(1+r)n/ {(1+r)n – 1}]

In which, P is the loan amount (Here, it is $37,500 – $3000 = $34,500), ‘r’ is the interest rate (Here, it is = 9% = 0.09), and n is the number of installments (here it is 36).

Putting the values, we get:

EMI = P * r * [(1+r)n/ {(1+r)n – 1}] = 34,500 * 0.09 * [(1+0.09)36/ {(1+0.09)36 – 1}] = 34,500 * 0.09 * 22.2512/(22.2512 – 1) = 34,500 * 0.09 * 1.0470 = $3251.11

So, the EMI amount is $3251.11 per month.

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