Question

Carol borrowed $9600 for 5 years and the interest on the loan was $6144.Find the monthly payment.

Answer 1

`\begin{gathered} I=PV\cdot r\cdot t \\ I=\text{Interest}=6144 \\ r=\text{interest rate} \\ PV=\text{Present value=9600} \\ t=\text{time}=5 \\ \text{Solving for r:} \\ r=\frac{I}{\text{PV}\cdot\text{t}}=(6144)/(9600\cdot5)=0.128 \end{gathered}`
`\begin{gathered} \text{PMT}=(rPV)/(1-(1+r)^(-n)) \\ \text{PMT}=(0.128\cdot9600)/(1-(1+0.128)^(-60)) \\ \text{PMT}=1229.693822\approx1229.7 \end{gathered}`

PMT = $1229.7