Question

A. What is the monthly payment for a$3,200 five-year loan with an APR of 3%.​

Answer 1

Answer:

$57.50

Step-by-step explanation:

we know that

The monthly loan payment formula is equal to

$M=\frac{P(\frac{r}{12})(1+\frac{r}{12})^{12t}}{(1+\frac{r}{12})^{12t}-1}$

where

M ----> is the monthly payment

P ---> the amount borrowed

r ---> interest rate as decimal

t ---> length of the loan in years

we have

$t=5\ years\\ P=\ 3,200\\ r=3\%=3/100=0.03$

substitute in the formula

$M=\frac{3,200(\frac{0.03}{12})(1+\frac{0.03}{12})^{12(5)}}{(1+\frac{0.03}{12})^{12(5)}-1}$

$M=\frac{3,200(0.0025)(1.0025)^{60}}{(1.0025)^{60}-1}$

$M=\ 57.50$