Hi everyone,

I am new to this site and I appreciate any help you offer.

I just want to make sure I am correct because I read into things and confuse myself even more!

Here goes: If you take out an $8000 car loan that calls for 48 monthly payments at an APR of 10%, what is the monthly payment? What is the effective annual percentage rate on the loan?


I have: 1.2% monthly rate at a payment of 96 per month..?

Thanks in advance!

Hi there! $8,000.00 @ 10% for 48 months would put your payment at $202.90. I'm not sure what you mean as far as what is the effective APR? On the above payment, $66.67 would be applied to interest and $136.23 would be applied to the principle in month one, $65.63 interest & $137.37 principle in month two, $64.39 interest & $138.51 principle in month three and so on and so forth. That's of course assuming only minimums are being paid each month. If it is a simple interest contract, then anything paid above the minimum due each month, gets applied directly to the principle.

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Originally Posted by msbionik

Hi everyone,

I am new to this site and I appreciate any help you offer.

I just want to make sure I am correct because I read into things and confuse myself even more!

Here goes: If you take out an $8000 car loan that calls for 48 monthly payments at an APR of 10%, what is the monthly payment? What is the effective annual percentage rate on the loan?


I have: 1.2% monthly rate at a payment of 96 per month...???

Thanks in advance!

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Hi KatiePerez,

Thanks for responding... What would the effective rate be then? I believe we are supposed to divide the APR by 12 for the amount of months per year and I now got 0.8333. Would this be the effective rate?

Why do you need the effective rate? Typically the effective rate is used on home loans which incorporates closing cost and points. A car loan is typically discussed at the full rate. I hope that you rate isn't 1.2% x 12 which would 14.4% annually!!