Question

In calculating the monthly payment for a loan with an 8.5% interest rate compounded monthly, what value should be used for i, the interest rate per period, as it appears in the following formula?

Answer 1

D 0.0071 <3

Explanation:

Answer 2

Answer: 0.85.

Explanation:

In calculating the monthly payment for a loan with an i% interest rate compounded monthly, the value of the interest rate per period we use in the formula we first convert it decimal form.

Now the given rate of interest i= 85%

To convert it in decimal, we divide it by 100, we get

i=
`(85)/(100)=0.85`

Hence, the value should be used for i in the formula of calculation the monthy payment , the interest rate per period is 0.85