Sheds R Us sells $600 sheds on a monthly payment plan over 2 years.
a) If the interest rate is 1.5% per month, find the monthly payment.
Answer = $
b) If instead the interest rate is 1.75% per month, find the monthly payment
Answer = $
can anyone help me with which format i should use .. have tried several, none of which seem to be correct.
Thought A was 25.46
and B was 25.75
but both are wrong
1.015(600 / 24) = $25.38 a month
1.0175(600/24) = ?
1.015(600 / 24) =
$25.38 is showing up wrong.
1.0175(600/24) = 25.44 which is showing wrong too.
Please see my second post.
To find the monthly payment for a shed sold at $600 on a monthly payment plan over 2 years, we need to use the formula for calculating the monthly payment on a loan with compound interest:
Monthly payment = (Principal amount * Monthly interest rate) / (1 − (1 + Monthly interest rate)^(−Number of months))
Let's begin with part a, where the interest rate is 1.5% per month:
1) Convert the interest rate to decimal form: 1.5% = 0.015
2) Calculate the monthly interest rate: 0.015 / 100 = 0.00015
3) Determine the number of months: 2 years = 2 * 12 = 24 months
4) Substitute the values into the formula:
Monthly payment = (600 * 0.00015) / (1 − (1 + 0.00015)^(-24))
Now, let's evaluate it:
Monthly payment ≈ $31.34 (rounded to 2 decimal places)
Therefore, the correct monthly payment when the interest rate is 1.5% per month is approximately $31.34.
Moving on to part b, where the interest rate is 1.75% per month, we follow the same steps:
1) Convert the interest rate to decimal form: 1.75% = 0.0175
2) Calculate the monthly interest rate: 0.0175 / 100 = 0.000175
3) Determine the number of months: 2 years = 2 * 12 = 24 months
4) Substitute the values into the formula:
Monthly payment = (600 * 0.000175) / (1 − (1 + 0.000175)^(-24))
Now, let's evaluate it:
Monthly payment ≈ $32.36 (rounded to 2 decimal places)
Therefore, the correct monthly payment when the interest rate is 1.75% per month is approximately $32.36.
I hope this helps! Let me know if you have any further questions.
A more realistic way to interpret this problem is
1.5% a month interest is actually 18% annual interest rate.
I = PRT
I = 600 * 0.18 * 2
I = 216
816 / 24 = 34 a month payment