Shelly Sanders gets a loan for $3,000 and repays the loan in 12 monthly payments of $258.75 per month. Under the APR formula, what is the amount of interest included in her first payment?
rev: 10_01_2019_QC_CS-182834
Multiple Choice
$8.75
$7.00
$13.55
$14.99
$16.15
$16.15
| Step-1:Calculaton of APR (Annual rate) | ||||||
| APR | =rate(nper,pmt,pv,fv)*12 | |||||
| = 6.40% | ||||||
| Where, | ||||||
| nper | = | Months | = | 12 | ||
| pmt | = | Monthly Payment | = | $ -258.75 | ||
| pv | = | Loan | = | $ 3,000.00 | ||
| fv | = | Future Value | = | 0 | ||
| Step-2:Interest expense included in the first payment | ||||||
| Interest Expense | = | Loan Amount | * | Interest Rate | * | Time |
| = | $ 3,000.00 | * | 6.400% | * | 1/12 | |
| = | $ 16.00 | |||||
| The difference in decimal place may be due to rounding off difference. |
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