Question

Ralph has just borrowed 1600 dollars to purchase a new stereo, at a nominal rate of interest of 12.2 percent convertible monthly. although he is charged interest from the moment he borrows the money, the first payment is not due for 7 months. if he will make 24 monthly payments, how much interest is in the 17th payment?

Answer 1

To calculate the interest in the 17th payment, we need to find the monthly payment amount and then calculate the interest for the 17th payment.

Step-by-step explanation:

To calculate the interest in the 17th payment, we need to find the monthly payment amount and then calculate the interest for the 17th payment.

First, let's calculate the monthly payment amount using the formula:

PV = R(1-(1+i)^-n)/i

Where:

• PV is the present value (loan amount)
• R is the monthly payment amount
• i is the monthly interest rate (12.2%/12)
• n is the total number of payments (24)

Once you find the monthly payment amount, you can calculate the interest for the 17th payment by multiplying the remaining balance after 16 payments by the monthly interest rate.