"What will be the monthly payment on a car loan if the purchase price is $18,000, there is no down payment, the loan rate is 4.5%, and the loan duration is 5 years?"

The monthly payment required is $335.57

Explanation:

Using excel formula pmt, the monthly payment on the car loan can be calculated.

The formula is given pmt(rate,nper,-pv,fv)

Note that the future value here is zero

pv=$18000

rate=4.5% annually and 4.5%/12 monthly=0.00375

nper is 5 years annually but 5*12 monthly=60

The monthly payment is $335.57  

Please note that the pv has a negative sign and the pv is zero

Kindly find attached spreadsheet showing how the monthly payment was arrived at.

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