[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!

[katieperez]

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.

[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!

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?

[Best701982]

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!!