A music company offers a loan to buy a drum set for $1500. The simple interest is 11.8% and the loan will be paid in equal monthly payments for 2 years. What is the monthly payment?
Total amount to pay = $1854
Monthly payment = $77.25
Ah, the sweet sound of borrowing money to make some noise! Now, let's calculate the monthly payment for your drum set loan.
First, we need to convert the interest rate to a decimal. So, 11.8% becomes 0.118.
Next, we need to determine the total amount to be paid back, which is the loan amount plus the interest. The total amount is $1500 + ($1500 * 0.118), which gives us $1500 + $177, or $1677.
Since the loan will be paid in equal monthly payments for 2 years, we have 2 years * 12 months/year = 24 months.
Finally, to calculate the monthly payment, we divide the total amount by the number of months: $1677 / 24 months = $69.88 (rounded to the nearest cent).
So, your monthly payment will be approximately $69.88. Happy drumming, and may the beats be with you!
To calculate the monthly payment for a loan, we can use the formula for calculating the monthly payment of a loan with simple interest:
Monthly Payment = Total Loan Amount / Number of Months
First, let's calculate the total amount to be paid back over 2 years with simple interest.
To find the total amount paid back, we need to add the interest to the loan amount.
Interest = Loan Amount * Interest Rate
Interest = $1500 * 11.8%
Now, let's calculate the total loan amount with interest:
Total Loan Amount = Loan Amount + Interest
Finally, we can calculate the monthly payment:
Monthly Payment = Total Loan Amount / Number of Months
Now, let's calculate the values step by step.
1. Calculate the interest:
Interest = $1500 * 11.8% = $177.00
2. Calculate the total loan amount:
Total Loan Amount = Loan Amount + Interest
Total Loan Amount = $1500 + $177.00 = $1677.00
3. Calculate the monthly payment:
Monthly Payment = Total Loan Amount / Number of Months
Monthly Payment = $1677.00 / (2 years * 12 months/year)
Monthly Payment = $1677.00 / 24
Monthly Payment ≈ $69.88
So, the monthly payment for the loan to buy a drum set is approximately $69.88.
To calculate the monthly payment for a loan with simple interest, we can use the formula:
Monthly Payment = Total Loan Amount / (Number of Months)
First, let's calculate the total interest paid over the loan period:
Interest = Total Loan Amount * Interest Rate
In this case, the Total Loan Amount is $1500 and the Interest Rate is 11.8%.
Interest = $1500 * 0.118 = $177
Next, let's calculate the total loan amount, including the interest:
Total Loan Amount = Loan Amount + Interest = $1500 + $177 = $1677
Now, we will calculate the number of months. In this case, it's 2 years, so we'll multiply by 12:
Number of Months = 2 years * 12 = 24 months
Finally, we can calculate the monthly payment:
Monthly Payment = Total Loan Amount / Number of Months = $1677 / 24 = $69.88 (rounded to the nearest cent)
Therefore, the monthly payment for the drum set loan is approximately $69.88.