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25 votes
25 votes
Question 15

1 pts
Liam buys a computer for $1800. He takes out a simple interest loan at 8% for this computer for 3
years. He puts no money down. What will be his monthly payments if he plans on paying it off in 3
years? Round to the nearest cent.

User Neuromouse
by
3.0k points

1 Answer

27 votes
27 votes

Answer:

$62

Explanation:

To start off, we will calculate the end amount he will pay:

A = P(1 + rt)

= 1800(1+3(0.08)

= 1800(1+0.24)

= 1800(1.24)

= 2232

He will have to pay 2232 dollars in 3 years

Since he plans to pay it off with monthly payments throughout the 3 years, we will have that loan divided by the amount of times he will make those monthly payments

3 years = 3 ( 12 months )

= 36 months

He will make 36 monthly payments

2232 / 36 = 62

So, in each monthly payment, he will pay $62.

Feel free to ask me any questions you may have about this problem!

User Eric Smalling
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2.8k points