Question

Please help!!

Eric is buying A dune buggy for $8800 with a down payment of $1200. The Bank approved a simple interest flat rate loan for three years at 15% APR. How much are the monthly payment loans? (round to the nearest cent)


a. $306.11

b. $346.39

c. $362.50

d. $402.78

Answer 1

The answer is "Option a"

Explanation:

dune buggy cost
`=\$8,800\\\\`

down payment
`=\$1,200`

Calculating net principle
`(P)=\$(8,800-1,200)=\$7,600`

time
`=3 \ years= 36 \ months\\\\`

rate
`= 15\%`

Calculating the sample interest:

`I=(ptr)/(100)`

`=(7,600 * 3 * 15)/(100)\\\\=76 * 3 * 15\\\\=76 * 45\\\\=3420`

Calculating the total amount payases:
`=A=P+I=\$(7,600+3,420)=\$11,020`

Calculating monthly loan payments:

`=(A)/(36)=(11,020)/(36)=\$306.11`