• capital one is advertising a 60-month, 5.99% apr motorcycle loan. if you need to borrow $8000 to purchase your dream harley davidson, what will your monthly payment be?

Given:
P = $8000, the principal
r = 5.99% = 0.0599, the interest rate
t = 60 months = 5 years, the duration
Assume n = 12, monthly compounding.

n*t = 12*5 = 60
r/n = 0.0599/12 = 0.004992

The total value of the loan is
A = P(1 + r/n)⁶⁰
    = 8000(1.004992)⁶⁰
    = 10785.434

Monthly payment = 10785.434/60 = $179.76

Answer: $179.46