Aiden can afford a $280-per-month car payment. If he is being offered a 4-year car loan with an APR of 1.8%, compounded monthly, what is the value of the most expensive car he can afford?
A.13,439.51
B.13,390.73
C.12,958.20
D.13,435.06
Use the formula of the present value of annuity ordinary. The formula is Pv=pmt [(1-(1+r/k)^(-kn))÷(r/k)] Pv present value? PMT payment per month 280 R interest rate 0.018 k compounded monthly 12 T time 4years Pv=280×((1−(1+0.018÷12)^(−12 ×4))÷(0.018÷12)) =12,958.20
