Question

Calculate the monthly payment from the following information by formula. (Do not round intermediate calculations. Round your answer to the nearest cent.)

Number of monthly payments	Amount financed	APR	PMT
48	$4,520	15%	$

Answer 1

P = Principal Loan =     $4,520.00

R = (Given Rate / No. of Payment in a Year) = 15%/12 = 1.2500%

N = Period = Loan term x No. of Payment in a Year =        48

PMT = Payment = P x R x (1+R)^N / ((1+R)^N - 1) = $125.79

             

Formula for calculating payment (working)         

PMT = P x R x (1+R)^N / ((1+R)^N - 1)     

PMT = 4520*1.25%*(1+1.25%)^48/(((1+1.25%)^48-1)    

PMT = 125.79   

Number of	Amount	APR	PMT
monthly payments	financed
48	$4,520	15%	$125.79