Find the monthly payment of a 4000 loan for 48 months at an

Find the monthly payment of a $4,000 loan for 48 months at an add-on 9%annual interest. Also, find the final balance if this loan is to be paid off atthe 30th payment (assuming that 29 payments have been made).

Solution

interest=principal*rate*time
i=prt
i=$4000*9%*4(48 months is 4 years)
i=$4000*.09*4
i=$360*4
i=$1440
add $4000 and $1440
$4000+$1440=$5440
you have to pay back $5440 in 48 equal payments
$5440/48=$113.33 per month
29*$113.33=$3286.57
$5440-$3286.57=$2153.43 is the payoff amount
notice that if you paid the loan off over 48 months that 48*$113.33=$5439.84-you still owe $0.16
47*$113.33=$5326.51
$5440-$5326.51=$113.49 (your last payment), $0.16 more