Answer:
(c) $31.75
Explanation:
First of all, you need to use some number sense to estimate an answer.
If the $900 loan had no interest, 1/3 of it would be paid off in each of the 3 years, or about $300 each year. You will be making 12 monthly payments each year, so the amount of principal being paid with each payment is $300/12 = $25. Any answer much above this amount will not make sense, so you can immediately reject all choices except $31.75.
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The simple interest on the loan is ...
I = Prt = $900×0.09×3 = $243
That, too, is divided among the 36 payments, so adds ...
$243/36 = $6.75 to each of the $25 payments we calculated above.
The monthly payment is ...
$25 +6.75 = $31.75