Question

You take out a loan for $4000.00 at 24% annual interest. You need to pay it off in 30 years.Calculate the numerator of the payment formula. Answer with 6 significant figures.

Answer 1

Payment = 4000 * (0.02 * (1 + 0.02)^360) / ((1 + 0.02)^360 - 1)

Explanation:

First, let's convert the annual interest rate to a monthly interest rate by dividing it by 12. In this case, the monthly interest rate is 24% / 12 = 2% or 0.02 as a decimal.

Next, let's calculate the total number of payments by multiplying the number of years by 12. In this case, 30 years * 12 months = 360.

Now we have all the values needed to calculate the monthly payment. Plugging these values into the formula:

Payment = 4000 * (0.02 * (1 + 0.02)^360) / ((1 + 0.02)^360 - 1)

Calculating this expression using a calculator or spreadsheet software will give us the numerator of the payment formula. The result will be a number with 6 significant figures.