Maya had finally saved up for her dream commuter car, a reliable pre-owned sedan priced at . She had $4,000 in her savings account for a down payment, but she needed a loan for the rest. After visiting her local credit union, she was approved for a 5-year (60-month) loan at an annual interest rate (APR) of 6% .

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). By subtracting her original $18,000 loan, she realizes she is paying to the bank for the privilege of borrowing the money. ✅ Answer

Before signing the papers, Maya wanted to know exactly what her monthly "rent" for that money would be. Step 1: Determine the Loan Amount (Principal)