3 Find the monthly payment for the loan indicated Round your

3 Find the monthly payment for the loan indicated. (Round your final answer to 42 43 60 two decimal places.) Amount of loan $10,500 at an annual interest rate of 4.4% for 5 years. 10500 45

Solution

Monthly Interest Rate = 4.40% / 12 Months = 0.36667%

Number of Periods = 5 Years x 12 Months = 60 Periods

Monthly Payment = [P x {r (1+r)ⁿ} ] / ( 1+r)ⁿ – 1

= [$10,500 x {0.0036667 x (1.0036667)⁶⁰}] / (1.0036667)⁶⁰ - 1

= [$10,500 x {0.0036667 x 1.2455755}] / 0.2455755

= [ $550,000 x 0.0045671] / 0.2455755

= $195.27

“ Monthly Payment for the Loan = $195.27 per month ”