Question

Suppose you want to get a loan for $ 5 , 000 at an interest rate of 5.3 % for 2 years to be paid back in 24 monthly installments. Calculate this loan using simple interest. What is the amount of the monthly payments? Round the answer to the nearest cent (hundredth).

Answer 1

Answer:

monthly payment =  $56.445

Step-by-step explanation:

given data

loan = $5000

interest rate r = 5.3 % = 0.053

time  t = 2 year = 24 months

solution

we will use here amount of the monthly payments formula that is

monthly payment = principal × $\frac{r}{1+(1-r)^{-t}}$      ................1

put here value and we get

monthly payment = 5000 × $\frac{0.053}{1+(1-0.053)^{-24}}$

monthly payment =  $56.445