Question

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?

Answer 1

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.