Suppose you borrowed $12,000 at an annual rate of 6% interest to buy a car and w

Question

Suppose you borrowed $12,000 at an annual rate of 6% interest to buy a car and wish to repay it in 5 equal payments at the end of each month of the next 5 years. Which is the closest to the amount of each of these payments? $2,364, $2,849, $2,544, or $2,436? Suppose you borrowed $12,000 at an annual rate of 6% interest to buy a car and wish to repay it in 5 equal payments at the end of each month of the next 5 years. Which is the closest to the amount of each of these payments? $2,364, $2,849, $2,544, or $2,436?

Explanation / Answer

You can calcualte the same by PMT function in Excel

=PMT(6%,5,12000)= $2849.

So you have to Pay $2849 for each payments.

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