Price of the car or Principle amount= $33000
Rate of interest = 5% or 0.05
Time period = 5 years
Interest = principle*rate*time
I = [tex]33000\times0.05\times5[/tex]
I = $8250
So, total amount that will be payable after 5 years will be = principle plus interest
[tex]33000+8250=41250[/tex]
So Let us assume that 5% rate is flat and this is not increasing or decreasing in 5 years. So, $41250 is to be paid in 60 months.
So in 1 month one has to pay = [tex]\frac{41250}{60}=687.50[/tex]
Hence, the monthly payment will be $687.50
