The monthly loan payments are $350 ⇒ B
Step-by-step explanation:
Simple Interest formula (Principal + Interest) is A = P(1 + rt) where:
- A is total accrued amount (principal + interest)
- P is principal Amount
- r is rate of interest per year in decimal
- t is time period involved in months or years
Adam is buying a hot air balloon for 19,000 with a down payment of 5,000. The bank approved a simple interest flat rate loan for 5 years at 10%APR.
We need to find how much the monthly loan payments are
∵ Adam is buying a hot air balloon for $19,000 with a down payment
of $5,000
- Subtract the down payment from the cost of the balloon
∴ P = 19000 - 5000 = 14000
∵ The bank approved a simple interest flat rate loan for 5 years at
10% APR
∴ t = 5
∴ r = 10% = 10 ÷ 100 = 0.1
- Substitute all of theses values in the formula above
∵ A = 14000[1 + 0.1(5)]
∴ A = 21000
∴ The loan payment is $21000
- The loan will pay in 5 years
∵ The number of monthly payment = 5 ×12 = 60
- Divide the amount of loan payment by 60
∴ The monthly loan payments = 21000 ÷ 60 = 350
The monthly loan payments are $350
Learn more:
You can learn more about the monthly payment in brainly.com/question/788903
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