Question

For an amortized loan, you are given the loan, annual interest rate, and length of the loan. Find the monthly payment necessary to pay off the loan. Do not round until the final answer. Then, round to the nearest cent.

amount: $9,000; rate: 9.6%; time: 3 years

Answer 1

Use the formula

P = L[(r/n)*(1 + r/n)^(n*t)]/[(1 + r/n)^(n*t) - 1]

where

L = amount loaned out (or amortized)
r = annual interest rate
n = compounding frequency
t = # of years

in this case

L = 9000
r = 0.096
n = 12 (usually compounded monthly)
t = 3

Answer 2

Im not getting the right answer please help! jim_thompson5910

Answer 3

P = L((r/n)*(1 + r/n)^(n*t))/((1 + r/n)^(n*t) - 1)


P = 9000((0.096/12)*(1 + 0.096/12)^(12*3))/((1 + 0.096/12)^(12*3) - 1)


P = 288.717440845243


P = 288.72

Answer 4

So the monthly payment is $288.72

Answer 5

can you help with this one too?
For an amortized loan, you are given the loan, annual interest rate, and length of the loan. Find the monthly payment necessary to pay off the loan. Do not round until the final answer. Then, round to the nearest cent.

Amount: $3,200; rate: 12%; time: 2 years.

Answer 6

use the same formula but now

L = 3200
r = 0.12
n = 12
t = 2

Answer 7

is the answer 150.64??

Answer 8

let me check

Answer 9

P = L((r/n)*(1 + r/n)^(n*t))/((1 + r/n)^(n*t) - 1)


P = 3200((0.12/12)*(1 + 0.12/12)^(12*2))/((1 + 0.12/12)^(12*2) - 1)


P = 150.635111114447


P = 150.64


So you are correct

Answer 10

what about this one?
John bought a new computer for $1,650. He paid a $160 down payment and financed the rest for 1 year at an interest rate of 7%. Find the total interest paid on the given amortized loan assuming that John makes monthly payments. Do not round until the final answer. Then, round to the nearest cent.

Answer 11

first find the monthly payment and tell me what that is

Answer 12

keep in mind he's not financing all of the 1650

Answer 13

im lost

Answer 14

he's financing 1650 - 160 = ???

Answer 15

1490

Answer 16

so L = 1490

Answer 17

r = 0.07

Answer 18

n = 12
t = 1

Answer 19

plug them all in

Answer 20

then tell me what the monthly payment is

Answer 21

57.10?

Answer 22

that's too low, try again

Answer 23

67.76?

Answer 24

still too low, show me your work of what you're typing in

Answer 25

the answer choices doesnt list anything higher than 67.76

Answer 26

I don't care about the final answer right now

Answer 27

I just want to know what the monthly payments are

Answer 28

this might help if you're completely stuck

http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx

it won't give you the final answer, but it will give you the monthly payment

Answer 29

but I recommend using the formula I gave you and practice practice practice

once you get the hang of things enough, then you can use the calculator

Answer 30

is it 124.21??

Answer 31

closer, but still a bit low

Answer 32

did you use that calculator to confirm?

Answer 33

what do i put for the loan start rate?

Answer 34

leave that alone

Answer 35

it doesn't matter when you start the loan date (so you can do it today or whenever)

Answer 36

that's just used for setting up payment tables (assuming you actually took out a real loan)

Answer 37

i plugged everything in but its still giving me 124.21

Answer 38

see attached of what you were supposed to plug in (and what monthly payment you're supposed to get)

Answer 39

do you see how to get that?

Answer 40

ohh okay i put in .07 instead of 7

Answer 41

i gotcha

Answer 42

so you make monthly payments of 128.92 for 12 months to get (128.92)*(12) = 1547.04

Answer 43

so you borrow 1490 dollars and pay back 1547.04 dollars

total interest paid = 1547.04 - 1490 = 57.04

Answer 44

wait so is 57.04 the answer?

Answer 45

yep

Answer 46

thats not one of the choices?

Answer 47

theres 57.10 though thats the closest

Answer 48

what are all your choices?

Answer 49

52.66
63.84
67.76
57.10

Answer 50

hmm there has to be a typo then, idk

Answer 51

okay thank you anyways

Answer 52

np