February 23, 2017

Homework Help: Algebra

Posted by Pamela on Friday, July 31, 2009 at 1:13am.

Suppose A is the amount borrowed, r is the interest rate (in decimal form), and m is the total number of monthly payments.

Let w = (r)/(12)

Then the formula to determine the monthly payment amount for a loan is given by


Suppose Alice buys a car and obtains a 5 year loan for $25,000 at an interest rate of 6%.

(a) What is the numerical value of w?

(b) What is the monthly payment? (Show values substituted in the formula, and calculate the numerical amount.) Note: Since the loan is an amount in dollars and cents, it’s important to maintain a high degree of precision in intermediate calculations, and round to the nearest cent at the end.

(c) If Alice makes all 60 payments, how much will have been paid altogether?

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