Question

Please lmk whats A, B, C

Answer 1

a. What is her monthly payment?
`\boxed {\$177.50}`

b. What is the total of all her monthly payments?
`\boxed{\$\;8,520.00}`

c. What is the total finance charge?
`\boxed{\$ 520.00}`

Explanation:

Loan amount = $8,000

APR =3.11% = 3.11/100 = 0.0311 as a decimal

Monthly interest rate in decimal = 0.0311/12 = 0.0026

Term of loan = 4 years = 4 x 12 = 48 months

Since Melissa makes payments monthly, her loan balance keeps decreasing

The formula for monthly payments on a loan of P at an annual interest rate of i per month for n months is given by the formula:


`PMT=(Pi(1+i)^n)/((1+i)^n-1)`

Here
P = $8,000
i = 0.0026
n = 48

So the monthly payment is:

`PMT = (8000\:\cdot 0.0026\left(1+0.0026\right)^(48))/(\left(1+0.0026\right)^(48)-1)`

This works out to

• Monthly payment = $177.50
  
  (I presume you are allowed to use a financial calculator to solve this but you can also solve this manually using the equation above)
  
  
• Total of monthly payments
  = $177.50 x 48 = $ 8520

• Total Finance Charge = 8250 - 8000 = $520