Question

Marshall has a $20,000, 4 year Loan loan with an APR of 5,4% what is his monthly payment?

Answer 1

Marshall's monthly payment = $464.22

Step-by-step explanation:

Principal = $2000

time = 4 years

In months = 4 × 12 = 48 months

Annual percentage rate (APR) = 5.4%

Using the monthly payment formula for APR:

`\text{Monthly payment =\lbrack rate + }(rate)/(\lbrack(1+rate)^(months)\rbrack-1)\rbrack* principal`

rate in the formula is calculated by dividing the APR by 1200

rate = 5.4/1200 = 0.0045

`\text{Monthly payment = \lbrack}0.0045\text{ +}(0.0045)/(\lbrack(1+0.0045)^(48)\rbrack-1)\rbrack*20000`
`\begin{gathered} \text{Monthly payment = \lbrack}0.0045\text{ +}(0.0045)/(\lbrack(1.0045)^(48)\rbrack-1)\rbrack*20000 \\ \text{= \lbrack}0.0045\text{ +}(0.0045)/(\lbrack1.2405011524\rbrack-1)\rbrack*20000 \\ =\lbrack0.0045\text{ +}(0.0045)/(0.2405011524)\rbrack*20000 \end{gathered}`
`\begin{gathered} =(0.0045\text{ +0.0187109291)}*20000 \\ =(0.0232109291)*20,000\text{ = 464.218582} \\ \text{Monthly payment = \$464.22} \end{gathered}`

Marshall's monthly payment = $464.22