Answer:
To calculate the monthly payment for an installment loan, we can use the formula:
M = P * r * (1 + r)^n / [(1 + r)^n - 1]
where:
M = monthly payment
P = principal (amount borrowed)
r = monthly interest rate (annual interest rate divided by 12)
n = total number of payments
In this case, Adolfo borrowed $6,800, and the loan is to be repaid in 24 monthly payments at an 18% APR. First, we need to calculate the monthly interest rate:
r = 18% / 12 = 0.015
Next, we can substitute the given values into the formula:
M = 6,800 * 0.015 * (1 + 0.015)^24 / [(1 + 0.015)^24 - 1]
M ≈ $342.03
Therefore, the monthly payment for Adolfo's installment loan is approximately $342.03.
Explanation: