Final answer:
To find Solomon's monthly payment for a $15,320 loan at 3.29% APR over 2 years, we use the loan payment formula, arriving at approximately $657.95 per month, which does not match any of the provided options.
Step-by-step explanation:
To calculate Solomon’s monthly payment for a $15,320 loan over a 2-year term with a 3.29% APR, we need to use the formula for calculating the monthly payment of a loan:
M = P × [i(1 + i)^n] / [(1 + i)^n − 1]
Where:
- M is the monthly payment
- P is the principal amount of the loan ($15,320)
- i is the monthly interest rate (APR divided by 12)
- n is the total number of payments (number of years times 12)
Firstly, we convert the APR to a monthly interest rate:
i = 3.29% / 12 months = 0.2741667%
Next, we convert the percentage to a decimal for the calculation:
i = 0.2741667 / 100 = 0.002741667
Now, we determine the total number of payments over 2 years:
n = 2 years × 12 months/year = 24 payments
Putting the values into the formula gives us:
M = 15320 × [0.002741667(1 + 0.002741667)^24] / [(1 + 0.002741667)^24 − 1]
After calculating, we find that M, the monthly payment, is approximately $657.95, which is not one of the options provided. It seems there might be an error in the question or the provided answers, as the correct calculation does not match the options A, B, C or D.