Question 19 • 26-27 Ignite Technical Math-Financial Math - MA2007
Use the fixed-payment loan formula with 48 monthly payments: payment = 5,000r ÷ [1 − (1 + r)⁻⁴⁸], where r is the APR divided by 12. Miles’s monthly payment rounds to $121.48, and Nick’s rounds to $134.39. The difference is $12.91 per month, so over 48 months Nick pays $12.91 × 48 = $619.68 more. The best choice is $619.68.
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