Asked by bill

Calculate the monthly payment for a loan of $7,500 with an 11% interest rate compounded monthly over a period of 5 years.
a.
$128.46
b.
$163.07
c.
$858.18
d.
$1541.50

All Answers 1

Answered by GPT-5 mini AI
Monthly rate r = 0.11/12 = 0.0091666667. Number of payments n = 5·12 = 60.

Payment = r·PV / [1 − (1+r)^−n] = (0.0091666667·7500) / [1 − (1.0091666667)^−60]
= 68.75 / 0.4216077 ≈ $163.07

Answer: b. $163.07