Question

A $ 43 000 loan is taken out on a boat with the terms 6 ​% APR for 36 months. How much are the monthly payments on this​ loan?

Answer 1

The monthly payments are computed as shown below:

Present value = Monthly payment x [ (1 – 1 / (1 + r)ⁿ) / r ]

r is computed as follows:

= 6% / 12 (Since payments are monthly, hence divided by 12)

= 0.5% or 0.005

So, the monthly payment will be computed as follows:

$ 43,000 = Monthly payment x [ (1 - 1 / (1 + 0.005)³⁶ ) / 0.005 ]

$ 43,000 = Monthly payment x 32.87101624

Monthly payment = $ 43,000 / 32.87101624

Monthly payment = $ 1,308.14 Approximately

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