OMG I CAN NOT get this !!!!
Purchase price of article = $495
Down payment = $50
Number of payments = 36
True annual interest rate = 18%
Monthly payment amount = $
D. 15.79
The formula is I= 2YC
________
M(N+1)
y = the number of payments made in a year.
m = the amount financed or how much money was loaned.
c = the total amount of interest charges.
n = the number of payments for the whole loan.
I = interest
Here's my solution:
495 - 50 = 445 >> amount financed
Interest = PRT
Interest = 445 * 0.18 * 3
I = 240.30
(240.30 + 445) / 36 = $19.04 >> monthly payments
I have the exact same question but the only answers listed for the multiple choice question are:
A- 12.55
B-14.59
C-14.84
D-15.79
To calculate the monthly payment amount, you can use the formula for calculating loan payments:
Monthly payment = P * (r * (1+r)^n) / ((1+r)^n - 1)
Where:
P = Principal amount (purchase price - down payment)
r = Monthly interest rate (annual interest rate / 12)
n = Number of payments
Let's calculate it step by step!
1. Calculate the Principal amount (P) which is the purchase price minus the down payment.
P = Purchase price - Down payment
P = $495 - $50
P = $445
2. Calculate the monthly interest rate (r) by dividing the annual interest rate by 12 and converting it to a decimal.
r = Annual interest rate / 12
r = 18% / 12
r = 0.18 / 12
r = 0.015
3. Calculate the number of payments (n) which is given as 36.
n = 36
4. Plug the values into the formula:
Monthly payment = P * (r * (1+r)^n) / ((1+r)^n - 1)
Monthly payment = $445 * (0.015 * (1+0.015)^36) / ((1+0.015)^36 - 1)
Now, you can use a calculator or a spreadsheet to evaluate this expression and get the monthly payment amount.