3
QuizMultiple Choice

Financing a Car

Question 3 • 2025-2026 GSP Mathematical Reasoning for Decision Making

Calculate the monthly payment for a 5-year car loan of $23,570 at 10.43% interest, compounded monthly.

Answer
A
$247.44
B
$337.56
C
$433.88
D
$505.79

Explanation

Use the monthly loan-payment formula: payment = principal × monthly rate ÷ [1 − (1 + monthly rate)^−number of payments]. Here the monthly rate is 0.1043 ÷ 12, and there are 5 × 12 = 60 payments. Substituting $23,570 gives a monthly payment of about $505.79, so the best answer is D, $505.79.

AI-written and checked against the verified answer.

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