Question

John takes out a loan for $ 12 , 000 at a simple interest rate of 4.5 % to be paid back in 36 monthly installments. What is the amount of the monthly payments? Round the answer to the nearest cent if necessary.

Answer 1

Answer:

M = 4,500

Explanation:

P = 12,000

i = 4.5% / (12 months) = 0.375

L = 36 months

                             0.375

M =  12, 000 * -----------------------------

                                                  -36

                        1 - ( 1 + 0.375)

M = 4,500