Question

In the monthly payment formula M = P1(1+1)", what value would you put for r(1 + r) -11if the interest rate is 6.9%?A. 6.9B. 0.0069C. 0.575D. 0.00575

Answer 1

Given the monthly payment formula:

`M=(Pr(1+r)^n)/((1+r)-1)`

And the interest rate is 6.9%

To find the value to put for r:

Here, r represents the interest rate.

The value to put for r will be:

`6.9\text{percent = }(6.9)/(100)\text{ = 0.069}`

Since we have 12(months) monthly payments in a year, divide 0.069 by 12 to get the monthly value for r:

`(0.069)/(12)=0.00575`

ANSWER:

`r\text{ = 0.00575}`