find the amount of interest and monthly payment for loan. Purchasing a living room set for $3,900 at 12% add-on interest for 2 years. (round monthly payment to the nearest cent)
P = (Po*r*t) / (1-(1+r)^-t).
r = 12% / 100% = 0.12 = APR expressed as a decimal.
Po = $3900.
t = 2 yrs.
Plug the above values into the given Eq
and get:
P = $4406.08.
Int. = P-Po = 4406.08 - 3900 = $506.08.
Monthly = P/t=4406.08 / 24mo.= $183.59.