Car Loan Payment Calculation
Exercise ID: tvm-real-006
Description
A borrower takes out a $25,000 car loan with a 4-year term and a 6% annual interest rate, compounded monthly. Calculate the monthly payment.
Given Values
Objective
Calculate PMT
Steps
Total 10 stepsStep 1:Clear TVM Registers
💡 Always clear TVM before starting a new problem.
Key Sequence:
Before Key Press:
0.00
After Key Press:
0.00
⏱ 1500ms
Step 2:Input N = 48
Key Sequence:
Before Key Press:
0.00
After Key Press:
48
⏱ 1400ms
Step 3:Store in N
Key Sequence:
Before Key Press:
48
After Key Press:
N=48.00
⏱ 1000ms
Step 4:Input I/Y = 0.5
Key Sequence:
Before Key Press:
N=48.00
After Key Press:
0.5
⏱ 1600ms
Step 5:Store in I/Y
Key Sequence:
Before Key Press:
0.5
After Key Press:
I/Y=0.50
⏱ 1000ms
Step 6:Input PV = 25000
Key Sequence:
Before Key Press:
I/Y=0.50
After Key Press:
25000
⏱ 2000ms
Step 7:Store in PV
Key Sequence:
Before Key Press:
25000
After Key Press:
PV=25000.00
⏱ 1000ms
Step 8:Input FV = 0
Key Sequence:
Before Key Press:
PV=25000.00
After Key Press:
0
⏱ 1200ms
Step 9:Store in FV
Key Sequence:
Before Key Press:
0
After Key Press:
FV=0.00
⏱ 1000ms
Step 10:Compute PMT
Key Sequence:
Before Key Press:
FV=0.00
After Key Press:
PMT=-587.13
⏱ 1500ms
- 1.Forgetting to convert years to months (N)
- 2.Forgetting to convert annual rate to monthly rate (I/Y)
- 3.Ignoring the negative sign on PMT (it is an outflow)
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