Question

Question 8 of 10

Homer took out a 6-month loan for $700 at an appliance store to be paid back
with monthly payments at a 20.4% APR, compounded monthly. If the loan
offers no payments for the first 3 months, which of these groups of values
plugged into the TVM Solver of a graphing calculator will give him the correct
answer for the amount of the monthly payment over the last 3 months of the
loan?

Answer 1

To find the correct answer for the amount of the monthly payment over the last 3 months of the loan, we can use the TVM Solver on a graphing calculator. Here's how you can set it up:

1. Principal (PV): -$700 (negative because it's a loan)

2. Monthly interest rate (I/Y): (20.4% APR / 12 months) = 1.7%

3. Number of periods (N): 6 months

4. Future value (FV): 0 (since the loan is fully paid off by the end)

5. Payments per year (P/Y): 12 (since the loan is compounded monthly)

6. Begin mode (BGN): Depending on the calculator, set it to "End" (assuming the payments are made at the end of each month)

By plugging in these values into the TVM Solver, you will get the correct answer for the amount of the monthly payment over the last 3 months of the loan.

Please note that different calculators may have slight variations in their setup, so it's important to refer to the user manual or guide for your specific calculator model if you encounter any issues

i have aready explained and did step by step. i hope this helps