Final answer:
The monthly payment for an $8,720 loan at 12.5% for 15 years is approximately $107.43.
Step-by-step explanation:
To calculate the monthly payment for a loan, we can use the formula:
Monthly payment = P * r * (1 + r)^n / ((1 + r)^n - 1)
Where P is the principal amount, r is the monthly interest rate, and n is the number of monthly payments.
For the given question:
P = $8,720
r = 12.5% / 100 / 12 = 0.01041667
n = 15 * 12 = 180
Substituting these values into the formula, we get:
Monthly payment = $8,720 * 0.01041667 * (1 + 0.01041667)^180 / ((1 + 0.01041667)^180 - 1)
Simplifying this expression, the monthly payment is approximately $107.43.