Question

A solar energy system is to be paid for with a loan in the amount of $2700. The interest rate on the loan is 10.5%/year, and the period is 8 years. The market discount rate is 9.5%/year. a. Compute the annual payment to the lender b. Compute the monthly payment for the same loan assuming that i

Answer 1

Answer:

The annual payment to the lender is $=\ 515.35$

The monthly payment for the same loan assuming is $=\ 41.69$

Explanation:

Annual Payment $=\frac{\ 2,700}{5.2392}$

$=\ 515.35$

Monthly Interest Rate $Monthly Interest Rate =\frac{\text { Annual Interest Rate }}{\text { Number of Months in Year }}$

$=\frac{10.50 \%}{12}$

$=0.875 \%$

Monthly payment:

$=\frac{\ 2,700}{64.77}$

$=\ 41.69$

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