Question

Determine the monthly payment of a loan for $3,000 at 7.5% interest compounded monthly for 36 months.

Answer 1

Answer:

The monthly payment is $93.32 ⇒ answer a

Step-by-step explanation:

* Lets explain how to solve the problem

- The monthly payment is $\frac{P(r)}{1-(1+r)^{-n} }$

  where:

# P is the loan amount

# r is the rate per period in decimal

# n is the number of periods

- The loan is $3000

- We need to find the monthly payment

∴ P = $3000

- The compound monthly interest is 7.5% for 36 months

∵ The period is 12 (1 year = 12 months)

- Divide the rate as a decimal by 12

∴ $r=\frac{7.5}{100(12)}=0.00625$

∴ r = 0.00625

∴ n = 36

* Lets calculate the monthly payment using the rule above

∵ Monthly payment = $\frac{(3000)(0.00625)}{1-(1+0.00625)^{-36}}=93.32$

∴ The monthly payment is $93.32

Answer 2

Answer:

$93.32

Step-by-step explanation: