171k views
3 votes
You want to purchase a Phone that has a price of $1,477, and you decide to pay for it with installments over 4 years. The store tells you that the interest rate is 9.4%. What is the amount of each monthly payment?

User Kayser
by
8.1k points

1 Answer

0 votes

Final answer:

The amount of each monthly payment will be approximately $38.97.

Step-by-step explanation:

To find the monthly payment amount, we can use the formula for calculating the monthly payments on a loan. We will use the formula:

PMT = (P * r * (1 + r)^n) / ((1 + r)^n - 1)

where:

  • PMT = monthly payment
  • P = principal loan amount = $1,477
  • r = monthly interest rate = 9.4%/12 (decimal form)
  • n = number of payments = 4 years * 12 months/year

Plugging in the values into the formula, we have:

PMT = (1477 * (0.094/12) * (1 + (0.094/12))^(4*12)) / ((1 + (0.094/12))^(4*12) - 1)

PMT = $38.97

Therefore, the amount of each monthly payment will be approximately $38.97.

User Msbmsb
by
8.5k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories