Question

Jerry goes to the bank and borrows $9,000 for farm equipment. The simple yearly interest is 9.5% and he pays off the loan over a period of 2 years with 24 equal monthly payments. What’s Jerry’s monthly payment

Answer 1

To solve this problem you must appply the formula for simple interest, which is:
 
 I = RxPxN
 
 I: Simple Interest.
 R:Rate (9.5$/100=0.095/12).
 P: The principal (P=$9000).
 N:number of periods (N=24).
 
 When you substitute these values into the formula, you obtain:
 
 I=RxPxN
 I=(0.095/12)x9000x24
 I=$1710
 
 Therefore, the monthly payment is:
 
 $1710/24=$71.25
 
 What is Jerry's monthly payment?
 
 The answer is: Jerry's monthly payment is $71.25