Question

100 POINTS!

Victoria will borrow $8,711 at 14.5% APR. She will pay it back over 5 years. What will her monthly payments be? (Use the table)

Show work for 100 POINTS!

Answer 1

$204.95

Explanation:

`\mathsf{monthly \ payment=((r)/(12)* P)/((1-(1+(r)/(12))^(-n))}`

where:

• P = total amount borrowed
• r = APR in decimal form
• n = total number of months of term of loan

Given:

• P = 8711
• r = 14.5% = 0.145
• n = 5 × 12 = 60 months

Substituting given values into formula:

`\implies \mathsf{monthly \ payment=((0.145)/(12)* 8711)/((1-(1+(0.145)/(12))^(-60))}`

`\implies \mathsf{monthly \ payment=\$204.95}`