Answered

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Use the appropriate formula to find (a) the monthly (n=12) payment on a loan with the given conditions and (b) the total interest that will be paid during the term of the loan.$9,200 is amortized over 6 years at an interest rate of 6.6%(a) the monthly payment is?(b) total interest paid is?

Sagot :

We will solve as follows:

We have that the interest rate is 6.6%:

[tex]P=\frac{(Pv\cdot R)}{(1-(1+R)^{n-1}}[/tex]

Here we have P the monthly payment, Pv is the Present value, R is the periodic interest rate(APR/n) n is the total number of interest periods, so:

[tex]P=\frac{(9200)(\frac{0.066)}{12})}{(1-(1+\frac{0.066}{12})^{11})})\Rightarrow P\approx155.09[/tex]

So, the monthly payment is approximately $155.09.

And the total interest paid is given by:

[tex]I=N\cdot M-P\Rightarrow I=(155.09)(72)-9200=I=1965.33[/tex]

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