Question

Use the add-on method of calculating interest to find the total interest and the monthly payment of a $1300 loan for 18 months at 8.3%. The total interest is S . (Type an integer or decimal rounded to the nearest cent as needed.) The monthly payment is - (Type an integer or decimal rounded to the nearest cent as needed.)

Answer 1

The total interest amount is $161.928 approximately.

The monthly payment is $8122 approximately.

Explanation:

Consider the provided information.

the monthly payment of a $1300 loan for 18 months at 8.3%.

Thus the loan amount is $1300 with No.of monthly installments is 18 and the interest rate per month is 8.3%/12 = 0.00692

Total Interest amount = Loan amount × Interest rate per month × No.of monthly installments

Total Interest amount = 1300 × 0.00692 × 18

= $161.928

Monthly Payment = (Loan principal + Total Interest ) / No.of monthly installments

Monthly Payment = (1300 + 161.928)/18

= $81.22