find the monthly payment for a loan. Round off to the nearest cents.
I did 300*0.10 = 30.00
330.00 divide by 12 years 27.50.
Where did I go wrong. It say my answer is wrong.
Thank you for who ever helps me
What is your original problem?
300.00 Loan for 12 months @ 10%
I agree with you. You'd pay $27.50 per month if the rate is simple interest.
Double check to make sure problem is exactly what was given you.
thank you so much
You're welcome.
To calculate the monthly payment for a loan, you need to use a specific formula called the loan payment formula. It takes into account the loan amount, the interest rate, and the loan term. Here's how to calculate it correctly:
1. Convert the interest rate to a decimal: Divide it by 100. For example, if the interest rate is 10%, it becomes 0.10.
2. Multiply the loan amount by the monthly interest rate to find the interest component of the payment. In your case, the loan amount is $300 and the monthly interest rate is 0.10, so the interest component is 300 * 0.10 = $30.00.
3. Determine the number of monthly payments over the loan term. You mentioned dividing by 12 years, so assuming the loan term is 12 years, you need to multiply it by 12 to get the total number of months: 12 * 12 = 144 months.
4. Use the loan payment formula: Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^(-Number of Months)).
Using the values from above, the calculation would be:
Monthly Payment = (300 * 0.10) / (1 - (1 + 0.10)^(-144)) ≈ $3.61 (rounded to the nearest cent).
Therefore, the correct monthly payment for your loan is approximately $3.61, not $27.50 as previously calculated.