Question

Your friend borrows $7500 to buy an all-terrain vehicle (ATV). The simple annual interest rate is 6%. She pays off the loan after 5 years of equal monthly payments. How much is each payment?

Answer 1

$162.50

Step-by-step explanation:

The total amount to be paid is 7500+5(7500)(0.06)=$9750.

There were a total of (5)(12)=60 payments, so each payment is 9750/60 = $162.50.