I need assistance to solve this problem: On September 1, 2018, you bought a car for $23,000. You paid down $1,200, and finance the rest for 5 years at 6.5% compounded monthly. You paid the monthly payments from October 1, 2018 until October 2020. Then decided to payoff the loan. The bank charge you a 2% prepayment penalty. - How much would you payoff the loan on November 1, 2020?

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Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.