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You buy a car from your neighbor at a price of $9,000. You pay $500 down and pay 9.5% on the balance. If you make monthly payments of $200, how many months (to the nearest hundredth of a month) will it take to pay off the loan? (Hint: Solve for N.)

Answer :

If the monthly payments mad s $200, the number of months it would take to pay off the loan is 46.54 months.

How many months would it take to pay off the loan?

The first step is to determine the total value of the loan.

Total value of the loan = (1 + interest) x amount of the loan

Amount of the loan = 9000 - 500 = $8,500

Total value of the loan = (1.095) x $8500 = $9307.50

Number of months it would take to pay off the loan = total value of the loan / monthly payments

$9307.50 / 200 = 46.54 months

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