Question

mario is taking a $2,900, 2-year loan with an APR of 5.44%. what is the montly payment for this loan? round to the nearest cent

Answer 1

Answer:

The monthly payment for this loan is $127.80

Step-by-step explanation:

The formula of the monthly payment is

$M.P=\frac{P(\frac{r}{n})}{1-(1+\frac{r}{n})^{-nt}}$

• P is the initial amount of the loan

• r is the rate in decimal

• n is the period of the time

• t is the time of the loan

∵ Mario is taking a $2,900, 2-year loan with an APR of 5.44%

∴ P = 2,900

∴ t = 2

∵ ART means annual percent rate

∴ r = 5.44% = 5.44 ÷ 100 = 0.0544

∴ n = 12

→ Substitute all these values in the formula above

∵ M.P = $\frac{2,900(\frac{0.0544}{12})}{1-(1+\frac{0.0544}{12})^{-(12)(2)}}$

→ use your calculator to find the answer

∴ M.P = 127.7992528

→ Round it to the nearest cent ⇒ 2d.p

∴ M.P = 127.80

∴ The monthly payment for this loan is $127.80