APR -- newbie question?

Question

If I'm purchasing a vehicle at $8000.00 with an APR of, lets say, 6.5% for two years, what would the final cost on it be? Is it 6.5% of 8k every year?

Answer 1

it would be 6.5%/12 = about 0.54% per month, on whatever balance you have that month... so if you have paid off $4000 already, the next month's interest will be $4000 x 0.54% = $21.6.  So it depends how fast you pay off the loan, how much interest you will pay.