Final answer:
The monthly payment for a $6,000 loan at 9.5% interest over 4 years is calculated using the amortization formula and comes out to be approximately $151.14.
Step-by-step explanation:
To calculate the monthly payment for a $6,000 loan at 9.5% interest over 4 years, we'll use the formula for monthly payments on an amortized loan:
M = P * (i / (1 - (1 + i)^(-n)))
where:
M = monthly payment
P = principal amount = $6,000
i = monthly interest rate (annual rate / 12) = 9.5% / 12
n = total number of payments (years * 12)
In this case, the monthly interest rate is 9.5% / 12 months = 0.792% or 0.00792 as a decimal. And n is 4 * 12 months = 48 months.
Plugging these numbers into the formula gives us:
M = 6000 * (0.00792 / (1 - (1 + 0.00792)^(-48)))
After calculation, the monthly payment comes out to be approximately $151.14.