THE SCENARIO
I want to buy a car, and after taxes and fees, it's going to cost me $24,978. I can get a loan for the car, with a 5-year term and a 4.3% interest rate. I've figured out that I can afford a car payment of $369 per month.
The question: How much does my down payment need to be if I want to buy the car?
THE SOLUTION
This one has two parts.
- Find out the maximum amount I can borrow
- Find out how much I'll have to put down by subtracting the loan amount from the total cost of the car
Part 1: The loan
First things first, make sure the calculator is using 12 Payments per Year.
N: 60 (The car loan is a 5-year loan)
I/YR: 4.3 (The car loan has a 4.3% interest rate)
PV: (This is what I'm trying to find)
PMT: -369 (I can afford $369 pe...
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