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frozen [14]
3 years ago
14

What would the monthly payment be for a $5,000 loan with a 6.25% interest rate compounded monthly spread over 60 months?

History
1 answer:
irinina [24]3 years ago
3 0
Given:
Principal amount = 5,000
interest rate = 6.25%
number of times the interest is compounded per year; 12 times, monthly
terms = number of years; 5 years, 60 months

A = P (1 + r/n)^nt
A = 5,000 (1 + .0625/12)^12*5
A = 5,000 (1 + 0.005)⁶⁰
A = 5,000 (1.35)
A = 6,750

6,750 / 60 months = 112.50 per month
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