HomeworkLib
Question

Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers...

Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those presented here. For long-term loans, the differences may be pronounced.

Assume that you take out a $2000 loan for 30 months at 7% APR. What is the monthly payment? (Round your answer to the nearest cent.)

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Information provided:

Present value= $2,000

Time= 30 months

Interest rate= 7%/12= 0.5833% per month

The monthly payment is calculated by entering the below in a financial calculator:

PV= -2,000

N= 30

I/Y= 0.5833

Press the CPT key and PMT to compute the monthly payment.

The value obtained is 75.86.

Therefore, the monthly payment is $75.86.

In case of any query, kindly comment on the solution.

0 0
Add a comment
Know the answer?
Add Answer to:
Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers...

    Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those presented here. For long-term loans, the differences may be pronounced. Assume that you take out a $4000 loan for 30 months at 9.5% APR. How much of the first month's payment is interest? (Round your answer to the nearest cent.)

  • Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers...

    Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those presented here. For long-term loans, the differences may be pronounced. Assume that you take out a $6000 loan for 33 months at 8.5% APR. How much total interest will you have paid at the end of the 33 months? (Round your answer to the nearest cent.)

  • Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers...

    Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those presented here. For long-term loans, the differences may be pronounced. You can get a car loan with a term of three years at an APR of 3%. If you can afford a monthly payment of $200, how much can you borrow? (Round your answer to the nearest cent.)

  • Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers...

    Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those presented here. For long-term loans, the differences may be pronounced. You can get a car loan with a term of three years at an APR of 3%. If you can afford a monthly payment of $300, how much can you borrow? (Round your answer to the nearest cent.)

  • Warning: Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to...

    Warning: Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those presented here. For long-term loans, the differences may be pronounced. You borrow $26,000 with a term of two years at an APR of 5%. Use the Estimation Rule for Short-Term Loans to estimate your monthly payment. (Round your answer to the nearest cent.) $

  • Value Simple interest monthly payment Add-on interest monthly payment $4,950.00 Choose the answer that best evaluates...

    Value Simple interest monthly payment Add-on interest monthly payment $4,950.00 Choose the answer that best evaluates $6,600.00 statement: $5,500.00 ns over add-or InputOutzone Inc. always prefers simpl loan, its monthly payment is lower. $6,050.00 Value Simple interest monthly payment Add-on interest monthly payment $59,950.00 Choose the answer that best evaluates tatement: $44,962.50 s over add- InputOutzone Inc. always prefers simpl loan, its monthly payment is lower. $49,958.33 $54,954.16 The comnany should only ar Forect Inans Chez Quis Inc. needs to...

  • 7. + 1/2 points Previous Answers CraudColAlg6 1.1.EX.018.MI. 6/100 Submissions Used My Notes Ask Your Teacher...

    7. + 1/2 points Previous Answers CraudColAlg6 1.1.EX.018.MI. 6/100 Submissions Used My Notes Ask Your Teacher You are buying a new car, and you plan to finance your purchase with a loan you will repay over 48 months. The car dealer offers two options: either dealer financing with a low APR, or a $2000 rebate on the purchase price. If you use dealer financing, you will borrow $14,000 at an APR of 3.3%. If you take the rebate, you will...

  • The problem: Monica's current debt consists of three types of loans: a bank card, an auto loan and a department store card. She owes a total of $25,000 and her monthly payments sum to $5...

    The problem: Monica's current debt consists of three types of loans: a bank card, an auto loan and a department store card. She owes a total of $25,000 and her monthly payments sum to $549.61.The amount she owes, the monthly payment and the interest rates appear in the table below: Loan Type Annual Percentage rate, APR Loan Amount Monthly Payment Current Debt) S12,000 $11,500 S 1,500 $25,000 Bank Card Auto Loan 18% 5.5% $243.85 $257.88 Department Store Card | 15%...

  • 18. What is the interest rate of a 6-year, monthly $625 annuity due with a present...

    18. What is the interest rate of a 6-year, monthly $625 annuity due with a present value of $37,654? 19. After saving diligently her entire career, Terrence is ready to retire with a nest egg of $672,500. She needs to invest this money in a mix of stocks and bonds that will allow her to withdraw $5,850 per month for 20 years. What annual interest rate (APR) does she need to earn? 20. Bradley borrowed $72,500 in student loans and...

  • The mortgage on your house is five years old. It required monthly payments of $ 1...

    The mortgage on your house is five years old. It required monthly payments of $ 1 422 , had an original term of 30 years, and had an interest rate of 9 % (APR). In the intervening five years, interest rates have fallen and so you have decided to refinancelong dashthat is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a 30-year term, requires monthly payments, and has an interest rate of 6.625...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT