Elementary Technical Mathematics

Published by Brooks Cole
ISBN 10: 1285199197
ISBN 13: 978-1-28519-919-1

Chapter 1 - Section 1.16 - Application Involving Percent: Business and Personal Finance - Exercises - Page 95: 10

Answer

$699.97

Work Step by Step

we have to find the loan amount Denny took so that we can find monthly payment. (truck price) 45500 - (rebate) 4500 = 41000 sales tax 6.5% of 41000 = [$41000\times\frac{6.5}{100}$] = 2665 total = 41,000 + 2665 = 43665 after Down payment balance amount = 43665 - [$43665\times\frac{20}{100}$] = 43665 - 8733 = 34932 therefore loan amount = P = 34,932 Interest rate = I = 0.075/12 = 0.00625 number of payments = N = 5x12 = 60 EMI = $\frac{P\times I\times(1+I)^{N}}{[(1+I)^{N}-1]}$ EMI = $\frac{34932\times 0.00625\times(1+0.00625)^{60}}{[(1+0.00625)^{60}-1]}$ = 699.9656 each installment will be 699.97
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