Answer:
697.87
Step-by-step explanation:
You are looking for the monthly payment (PMT) on a loan (borrow = loan).
This is the formula you would use for installment loans (loan payment)
PVA = PMT [(1 - (1+APR/n)^-nY)/APR/n]
<u>NOTE: </u>
PMT = regular payment amount = ?
PVA = starting loan principal (amount borrowed) = 29542
APR = annual percentage rate (as a decimal) = 0.063
n = number of payment periods per year (they told you that it is monthly, so n =12)
Y = loan term in years (can be a fraction) = 4
NOTE: a helpful tip is so start with the original formula and rearrange it to make what you are looking for the subject of the formula.
We're solving for the monthly payment. So rearrange the formula:
PVA = PMT [(1 - (1+APR/n)^-nY)/APR/n]
PMT = [PVA (APR/n)]/(1 - (1+APR/n)^-nY)
PMT = [29542 (0.063/12)] / (1 - (1+ 0.063/12)^-12x4)
∴ PMT = 697.8653...
Round off the answer to as many decimal places as instructed by your lecturer/teacher.
Here we have rounded off to 2 decimal places:
∴ PMT = 697.87
