Answer:
- monthly payment: $304.15
- total interest: $3249.00
Step-by-step explanation:
Using the time-value-of-money functions on your calculator, you can find the monthly payment to be $304.15.
The calculator function requires several inputs. There are 12 payments per year for 5 years, for a total of 60 monthly payments. As the problem statement tells you, the present value is 15,000, the interest rate is 8%. You want the remaining amount due after 5 years (the future value) to be zero. There are 12 payments per year, and interest is compounded 12 times per year.
After finding the monthly payment, you can find the total amount repaid by multiplying it by 60 (the number of months). Then the interest paid is the difference between that ($18249.00) and the initial loan amount ($15,000.00).
... $18,249 -15,000 = $3,249.00
The attachment shows what these calculations look like on a TI-84 calculator.
