Question

- Nick will borrow $8700 at 13.5% APR. He will pay it back over 5 years.

What will his monthly payment be?

Answer 1

His monthly payment will be
`\$242.875`.

Explanation:

Given that,

Amount borrowed by Nick is
`\$8700`.

Rate of interest per Annum is
`13.5\%`.

Time taken by Nick to Pay it back is
`5\ years`.

To find:- What will his monthly payment be ?

So,
`Principle=\$8700`,
`R=13.5\%` &
`Time=5\ years`

`S.I=(P* R* T)/(100)`

`S.I=(8700* 13.5* 5)/(100) = (587250)/(100)`

`S.I=5872.5`

Here, Amount to be paid after
`5\ years` will be,

`A=P+I`

`A=8700+5872.5`

`Amount=\$14572.5`

Then,

Amount should be paid in a month for next
`5\ years` would be
`(14572.5)/(60) =\$242.875`.

{
`5\ years = 60\ months`} Therefore,

His monthly payment will be
`\$242.875`