Emily is buying a new refrigerator for $1,400. The distributor is charging her an annual interest rate of 10.7% and is using the add-on method to compute monthly payments. If she pays off the loan in 36 months, what are her monthly payments? If she makes a down payment of $220, how much will her monthly payments be? Do not round until the final answer. Then, round to the nearest cent.

Question

anonymous · Answer

in the first case the monthly payments would be $51.37
in the second case w/ a down payment the monthly payments would be $43.30

anonymous · Answer

pretty much same process as last one but with the down payment you just subtract it from the initial loan of 1400 and use that as your PV

anonymous · Answer

ooook ok i gotcha

anonymous · Answer

so its just the add on interest formula? payment= P (1+rt_/mt

anonymous · Answer

yeah thats right