Sheds R Us sells 500 sheds on a monthly payment plan over 3

Sheds R Us sells $500 sheds on a monthly payment plan over 3 years.

a) If the interest rate is 1.25% per month, find the monthly payment. Answer = $

b) If instead the interest rate is 1.5% per month, find the monthly payment Answer = $

Solution

(a) Monthly rates   1.25% (b) Monthly rates   1.50% Number of payments 36 Number of payments 36 Present value   500 Present value   500 Monthly Payment ($17.33) Monthly Payment ($18.08) formula PMT(1.25%,36,500) formula PMT(1.5%,36,500)