Question

A store offers a loan of $900 to buy a computer. The terms of the loan are for 5% simple interest and equal monthly payments for three years. What is the monthly payment?

Answer 1

28.75

Explanation:

I=PRT

I=900x0.05x3

I=135

3 years=36 months

(135+900)/36=$28.75

Therefore, the answer is $28.75 per month

Answer 2

Interest Amount (I) = P x r x t = 900 x 5% x 3 = 135
So total amount to be paid over 3 years = Principal Amount + Interest Amount= 135 + 900 = 1035 (over 3 years = 36 months)= 1035 / 36 = $28.75 per month