Question

Compute the monthly payments for an add-on interest loan of $ 2890, with an annual interest rate of 10% and a term of 3 years.

Answer 1

The principle is $2890 the rate is 10% and the term is 3 years so it follows:

`P=2890,r=0.1,n=3`

The interest is given by:

`I=p* n* r=2890*0.1*3=867`

The principle to be repaid is given by:

`P^(\prime)=(2890)/(36)=80.28`

The monthly interest will be:

`I=(867)/(36)\approx24.083`

The monthly payment is given by:

`M=P^(\prime)+I=104.363`

The monthly payment is $104.363.