Question

John takes out a loan for $ 10 , 000 at a simple interest rate of 5 % to be paid back in 36 monthly installments.

Answer 1

The monthly principal and interest payment John will pay monthly is $3,750.04

What is the amount of principal and interest repayment?

Given:

• P = 10,000
• i = 5% / (12 months) = 0.375
• L = 36 months

$M = 10000 \times \frac{0.375}{ {1 - (1 + 0.375)}^{ - 36} }$

$M = 10000 \times \frac{0.375}{ {1 - (1.375)}^{ - 36} }$

$M = 10000 \times \frac{0.375}{ {1 - (0.00001049791)} }$

$M = 10000 \times \frac{0.375}{ 0.99998950208 }$

$M = 10000 \times 0.37500393675$

$M = 3750.03936758$

Approximately,

M = $3,750.04

Therefore, John will be be repaying $3,750.04 monthly including principal and interest

Read more on simple interest:

brainly.com/question/20690803

#SPJ1