Compute the monthly payments for the add on interest loan. The amount of the loan is $8,276.17. The annual interest rate is 5.7%

Question

2 years ago

6

. The term of the loan is 5.5 years.

1 answer:

podryga [215] · Answer 1 · 2023-10-29T18:49:53+03:00

The monthly payments for this add on interest loan are of $164.71.

Given Information and Formula Used

It is given that for an add on interest loan,

Principal Amount, p = $8,276.17

Annual Interest Rate, r = 5.7%

Term of the loan, T = 5.5 years

The formula for simple interest is given as follows,

I = (p)(r)(t)/100 ............... (1)

The formula for total amount of add on interest is given by,

A = p + I ....................... (2)

Computing the Interest

Substitute the given values of p, r, and t in the formula (1) of interest to get,

I = (8276.17)(5.7)(5.5)/100

I = 259457.9295/100

I = $2,594.58

Computing the Monthly Payment for Add-on Interest Loan

Substituting the values of p and I in the formula (2), we obtain the total amount as,

A = $ (8276.17 + 2594.58)

A = $ 10,870.75

Monthly payment for the add on interest loan = A/t(in months)

= $ (10,870.75/66)

= $164.71

Therefore, monthly payments of $164.71 are to be made for the add on interest loan.

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