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4. Rachel has a $15,000, three-year loan with an APR of 7.25%. A. What is the monthly payment?​

Sagot :

Answer: $507.70

Step-by-step explanation:

1): Find how much money is added on to the loan at the end of the year

   To find that we find 7.25% of $15,000.00 this is $1087.50

2): Now that we know how much is added on to the loan each year, we times that amount by 3, since it is a three-year-loan.

   $3,277.50 + $15,000.00 = $18,277.50

3). Now we have the total amount of money that Rachel owes in the total 3 years, but the problem is asking us to find the monthly payment, so we have to divide this by 36 since there is 12 months in a year and this is a 3 year loan (3 x 12).  Once you have divided this you get $507.70.  Which is how much Rachel owes a month

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