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1 vote
Solve the problem using the formula below.

Given a note for $1,000, with 24 equal monthly payments, and a 7.5% true annual interest rate is charged. What is the principal plus interest payment?

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Solve the problem using the formula below. Given a note for $1,000, with 24 equal-example-1

2 Answers

5 votes

Answer:

The correct answer is $44.92

Explanation:

We all know you're not doing this

User Lenn
by
5.9k points
6 votes

The usual formula for finding the amount A of a monthly payment on principal amount P with annual interest rate r over t years is

... A = Pr/(12ยท(1 -(1+r/12)^(-12t)))

Filling in P=1000, r=.075, t=2, you get

... A = 45.00


The montly payment is $45.00.


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The given formula looks nothing like one used to compute the payment, nor is it anything like a formula used to compute interest on such a loan. We cannot figure out how to use it (or if it is even applicable) without knowing the definitions of the variables involved.

User Nunu
by
6.2k points