Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those pre

Question

3 years ago

12

Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those pre

sented here. For long-term loans, the differences may be pronounced. Assume that you take out a $2000 loan for 30 months at 9% APR. How much of the first month's payment is interest

Business

1 answer:

zloy xaker [14] · Answer 1 · 2022-10-11T04:38:18+03:00

Answer:

the first month payment of interest is $74.70

Explanation:

The computation of the first month payment of interest is shown below

Given that

PV = $2,000

NPER = 30

RATE = 9% ÷ 12 = 0.75%

FV = $0

The formula is given below:

= -PMT(RATE;NPER;PV;FV;TYPE)

After applying the above formula, the monthly interest payment is $74.70

hence, the first month payment of interest is $74.70