Question

Troy juth wants to purchase new dive equipment for underwater connection, his retail store in colorado springs. he was offered a $45,000 loan at 3% for 60 months. what is his monthly payment by formula? (round your answer to the nearest cent.)

Answer 1

PMT= r(PV)/ 1-(1+r)^{-n}

r=rate = .03/12

PV = Previous Value = 45,000

n=number of months = 60

Payment is $808.59

Answer 2

The monthly payment is $808.59 to the nearest cent.

Step-by-step explanation:

The payment can be calculated using the formula:

P = iA / [1 − (1+i)^-N]

Where:

P = The monthly payment

i = The interest rate per period i.e. per month

A = The loan amount

N = Total number of payments for life of the loan

P = iA / [1 − (1+i)^-N]

i = 3%/12 = 0.0025

A = $45,000

N = 60 months

P = 0.0025*45000 / [1 − 1.0025^-60]

P = 112.5 / [1 − 0.8608691058]

P = 112.5 / 0.1391308942

P = 808.59108 → $808.59 is the monthly payment