Question

Lauren owns a sign company. She borrows $75 000 to purchase a laser engraver. The

current interest rate is 7.2%/a compounded monthly. The term of Lauren's loan is 20
years. How much will Lauren pay per month?

Answer 1

$1,313.3 per month

Explanation:

A=p(1+r/n)^nt

P=principal=$75,000

r=interest rate=7.2%=0.072

t=20 years

n=12 months

A=p(1+r/n)^nt

=75,000(1+0.072/12)^12*20

=75,000(1+0.006)^240

=75,000(1.006)^240

=75,000(4.2026)

=315,195

A=$315,195

The term of Lauren's loan=20 years

20 years×12 months=240 months

Lauren's pay per month =$315,195/240

=$1,313.3125

Approximately $1,313.3 per month