sherman jones borrows $675 from the REGAL LOAN COMPANY.he agrees to repay the loan in 15 months
the interest rate is 23%
how much money must sherman pay ???
Is it repaid in equal montly amounts?
Loan and credit card companies tend to like high interest rates with low minimum monthly payments, to maximize their interest earnings.
If he waits until the end of 15 months to repay, the amount due is 675[1 + (15/12)*0.23]= $882.00
If he pays off in equal monthly amounts of $52.21, the loan will be fully paid in 15 months and the total amoount paid will be $783.15
There is a formula for that, but I was lazy and used an online amortization table.
http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx