Antoine Smith wants a new pickup truck listed for $70,900. He will make a down payment of $10,000 and finance the balance at 3.17% interest for 6 years (72 months). Find the monthly payment using a spreadsheet. Round your answer to the nearest cent. What is the monthly payment?
Answer (1)
To find the monthly payment for Antoine Smith's new pickup truck using a spreadsheet, you can use the formula for calculating the monthly payment on an installment loan. This is often done using the PMT function in a spreadsheet application like Microsoft Excel or Google Sheets. Let's go through the steps:
Identify the key values you need for the calculation:
The price of the truck is $70,900.
The down payment is $10,000.
The loan amount is calculated by subtracting the down payment from the price of the truck: Loan Amount = 70 , 900 − 10 , 000 = 60 , 900
The interest rate and loan term:
The annual interest rate is 3.17%, which needs to be converted to a monthly interest rate by dividing by 12: Monthly Interest Rate = 100 × 12 3.17 ≈ 0.0026417
The term of the loan is 6 years, which is 72 months.
Use the PMT function in the spreadsheet:
The PMT function calculates the payment for a loan based on constant payments and a constant interest rate.
In a spreadsheet, you would enter the function as follows: PMT(rate, nper, pv)
rate : The interest rate for each period (monthly rate ≈ 0.0026417 ).
nper : The number of periods (72 months).
pv : The present value, or total amount of the loan ($60,900).
Enter it in a spreadsheet like this: =PMT(0.0026417, 72, -60900) (the negative sign is used in spreadsheets to indicate an outgoing payment).
Calculate the monthly payment:
Using the provided information, the spreadsheet will compute the monthly payment for the loan.
After calculation, the monthly payment will be approximately $939.28.
Therefore, Antoine's monthly payment for his new pickup truck will be about $939.28 when rounded to the nearest cent.
