To calculate Eric's monthly payment under an add-on plan, we first need to calculate the total amount he will repay over the 9-month period.
Simple interest is calculated using the formula: Interest = Principal x Rate x Time
Interest = $1,800 x 13.5% x 9 months
Interest = $1,800 x 0.135 x 9
Interest = $2,430
Total amount to be repaid = Principal + Interest
Total amount to be repaid = $1,800 + $2,430
Total amount to be repaid = $4,230
Now, we need to calculate Eric's monthly payment:
Monthly payment = Total amount to be repaid / Number of months
Monthly payment = $4,230 / 9
Monthly payment = $470
Therefore, Eric's monthly payment under the add-on plan would be $470.
Eric borrowed $1,800 for 9 months at 13.5% simple interest under an
add-on plan. What was his monthly payment?
1 answer
1 answer