Question

Rhonda wants to take out a four-year loan for a car. What type of computation would she use to calculate monthly payments?

a) Amortization
b) Compound interest
c) Depreciation
d) Net present value

Answer 1

Rhonda would use the computation of Amortization to calculate monthly payments for a four-year loan.

Step-by-step explanation:

When calculating monthly payments for a four-year loan, Rhonda would use the computation of Amortization.

Amortization calculates the equal monthly payments required to repay a loan over a specified period of time, taking into account the principal amount, interest rate, and loan term.

By using amortization, Rhonda can determine how much she needs to pay each month in order to fully repay the loan by the end of the four-year term.