What Is The Monthly Payment On A $20,500 Auto Loan With 9% Annual Interest Paid Over 3 Years?

 To calculate the monthly payment on a loan, you can use the formula for the monthly payment of an amortizing loan:

$�={\displaystyle \frac{�\cdot �\cdot (1+�{)}^{�}}{(1+�{)}^{�}-1}}$

Where:

• $�$ is the monthly payment
• $�$ is the principal loan amount (in this case, $20,500)
• $�$ is the monthly interest rate (annual interest rate divided by 12)
• $�$ is the total number of payments (loan term in years multiplied by 12)

First, let's calculate the monthly interest rate ($�$):

$�={\displaystyle \frac{9\mathrm{\%}}{12\times 100}}=0.09\mathrm{/}12=0.0075$

Next, let's calculate the total number of payments ($�$):

$�=3\times 12=36$

Now, we can plug these values into the formula:

$�={\displaystyle \frac{20500\cdot 0.0075\cdot (1+0.0075{)}^{36}}{(1+0.0075{)}^{36}-1}}$

After calculating this expression, you'll find that the monthly payment ($�$) on a $20,500 auto loan with 9% annual interest paid over 3 years is approximately $652.84

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