Question

Suppose Capital One is advertising a 60​-month, 5.89 % APR motorcycle loan. If you need to borrow $ 9 comma 400 to purchase your dream​ Harley-Davidson, what will be your monthly​ payment?​ (Note: Be careful not to round any intermediate steps less than six decimal​ places.)

Answer 1

Answer:

My Monthly payment will be $181.25

Explanation:

A loan provide funds for acquisition of asset and for investment purposes and its allows the arrangement for flexible repayments throughout the loan period based on terms agreed between the lender and borrower.

Following Formula used to calculate the installment payment.

Loan  = Payment x $\frac{(1-(1+r)^-n)}{r}$

9,400 = Payments x   $\frac{(1-(1+0.0589/12)^-60)}{0.0589/12}$

9,400 = Payment x 51.863

Payments = 9,400 / 51.863

Payments = 181.25