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You plan to borrow $3825 at 15% annual interest for 4 years. What will your monthly

payment be? Use the formula . Make sure to label each variable. must show work

You plan to borrow $3825 at 15% annual interest for 4 years. What will your monthly-example-1
User Guiomie
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2 Answers

4 votes
$94.87 will be the interest needed
User Sada
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6 votes

We can use the formula for the monthly payment of a loan to calculate the amount we need to pay each month:

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

Where:

M = the monthly payment

P = the principal (the amount borrowed)

r = the monthly interest rate (which is the annual interest rate divided by 12)

n = the total number of months in the loan term (which is the number of years multiplied by 12)

Plugging in the given values, we get:

P = $3825

r = 15% / 12 = 0.0125

n = 4 years * 12 = 48 months

M = ($3825 * 0.0125 * (1+0.0125)^48) / ((1+0.0125)^48 - 1)

M ≈ $94.87

Therefore, the monthly payment will be approximately $94.87.

User Ralfonso
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