Answer:
$526.3 is the monthly payment
Step-by-step explanation:
We use the compound interest formula to calculate the total amount payable on the loan.
Mathematically;
A = P(1 + r/n)^nt
Where A is the amount to pay
P is amount borrowed = 22,000
r is interest rate = 7.25/100 = 0.0725
t is years = 5 years
n is the number of times we compound lee year = 12 times since it’s monthly
Substituting these values, we have
A = 22,000(1 + 0.0725/12)^(12)(5)
A = 22,000(1 + 0.006041666666667)^60
A = $31,578
Monthly payment is total amount/ number of months
There are sixty months in 5 years
So monthly payment is 31578/60 = $526.3
