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March 29, 2017

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The owner of a flower shop needs a short-term loan to tide her business over until she completes the sale of some unused property. She asks the bank for a $25,000 six-month loan. The bank agrees to give her the loan, but attaches a hefty interest rate of 18 percent. Calculate the monthly payment, and explain how the florist can handle taking this loan.

do I multiply
.18*25,000

i'm not sure how to do this one either

  • U.S. and Global Economics - ,

    Yes, that's a good start.

    0.18*25,000 = 4,500 interest for one year

    The loan is for only 1/2 year, so divide:
    4,500 / 2 = 2,250

    (2,250 + 25,000) / 6 = $_________ a month

  • U.S. and Global Economics - ,

    thx so much!

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