Question

Find the payment necessary to amortize the loan. Round the answer to nearest cent. $12,000; 12% compounded monthly; 48 monthly payments ..... O A. $316.23 O B. $316.01 O C. $1,446.27 O D. $310.98

Answer 1

The payment necessary to amortize the loan is approximately $316.01.

Step-by-step explanation:

To find the payment necessary to amortize the loan, we can use the formula for the monthly payment of an amortizing loan:

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

Where:
PV = Present value of the loan ($12,000)
r = Monthly interest rate (12%/12 = 1%)
n = Number of monthly payments (48)

Plugging in the values:

P = (12,000 * 0.01) / (1 - (1 + 0.01)^-48)

Calculating this will give us the approximate monthly payment:

P ≈ $316.01

Answer 2

To find the payment necessary to amortize the loan, you can use the formula for calculating the monthly payment on a loan. For this loan amount of $12,000, an interest rate of 12% compounded monthly, and 48 monthly payments, the payment amount would be approximately $316.23. So, the correct answer is option A. $316.23.