Car Payment Calculation Quiz

What are the three key components needed to calculate car payments for a fixed-rate loan?

• Principal, monthly interest rate, and loan term in years

• Principal, annual interest rate, and loan term in years

• Principal, monthly interest rate, and total number of payments

• Principal, annual interest rate, and total number of payments

How do you convert an annual interest rate from a percentage to a decimal?

• Divide by 1000

• Add 1 and divide by 100

• Multiply by 100

• Drop the percent sign and move the decimal two places to the left

In the example provided, what is the principal amount of the loan?

• $28,000

• $33,000

• $23,000

• $5,000

What is the total number of payments for a 5-year loan with monthly payments?

• 5

• 12

• 60

• 120

What is the calculated monthly car payment in the example?

• $438.27

• $500.00

• $400.00

• $450.00