Final answer:
To calculate the interest future values and monthly payment for a loan, we can use the formula A = P(1+r/n)^(nt), where A is the future value, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years. In this case, Toms wants to buy furniture for $3000 using a 2-year loan at 12% interest. The future value of the loan is $3804 and the monthly payment is $158.50.
Step-by-step explanation:
To calculate the interest future values and monthly payment for a loan, we can use the formula A = P(1+r/n)^(nt), where A is the future value, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years. In this case, Toms wants to buy furniture for $3000 using a 2-year loan at 12% interest. We can calculate the future value of the loan by substituting the values into the formula. The monthly payment can be determined by dividing the future value by the number of months in the loan term.
First, let's calculate the future value:
A = 3000(1+0.12/12)^(2*12) = 3000(1+0.01)^24 = 3000 * 1.268: A = $3804
Next, let's calculate the monthly payment:
Monthly Payment = 3804 / (2*12) = $158.50