Question

Using technology, determine the monthly payment on a 6 year loan of $15,250 at 3.5% compounded monthly. Round your answer to the nearest cent.
a. $234.75c. $582.70b. $235.13d. $590.05

Answer 1

235.13 hope it helps

Answer 2

Answer:

Option 3 or b - The monthly payment is $235.13.                                                                        

Step-by-step explanation:

Given : A 6 year loan of $15,250 at 3.5% compounded monthly.  

To find :  Monthly payment ?

Solution :

The formula to find monthly payment is

$M=\frac{\text{Amount}}{\text{Discount factor}}$

Discount factor is $D=\frac{1-(1+i)^{-n}}{i}$

Substitute in the formula,

$M=\frac{A}{\frac{1-(1+i)^{-n}}{i}}$

$M=\frac{A\times i}{1-(1+i)^{-n}}$

where, A is the amount A=$15250

r is the rate = 3.5%=0.035 compounded monthly

$i=\frac{r}{12}=\farc{0.035}{12}=0.00291$

time t=6 years

Time in months $n=t\times 12=6\times 12=72$

Substitute all the values in the formula,

$M=\frac{15250\times 0.00291}{1-(1+0.00291)^{-72}}$

$M=\frac{44.479}{1-(1.00291)^{-72}}$

$M=\frac{44.479}{1-0.8112}$

$M=\frac{44.479}{0.18916}$

$M=235.13$

Therefore, The monthly payment is $235.13.

So, Option 3 or b is correct.