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?

Answer 1

Answer: $378.33

Explanation:

First we calculate the Simple interest which will be:

= 12000 × 4.5% × 3

= $1620

Total amount to be paid = $12000 + $1620 = $13620

Since there are 36 monthly installments, the amount of the monthly payments would be:

= $13620 / 36

= $378.33