Chiara purchased a new natural gas barbecue for $2,500 and made a down payment that was 30% of the purchase price. She financed the remaining balance for 9 months at an annual interest rate of 5.5% compounded monthly. What is Chiara's monthly payment? (Round your answer to the nearest cent.)

Answer 1

2,500-0.3*2,500 = $1750 financed.

P = Po(1+r)^n.
r = 0.055/12 = 0.00458.
n = 9 compounding periods.
P 1750(1.00458)^9 = $1823.47.
1823.47/9 = $__ = monthly payment.

Answer 2

I totally disagree with the previous post.

amount still outstanding = 1750
i = .055/12 = .00458333...
n = 9
paym = ?

paym(1 - 1.00458333...^-9)/.00458333... = 1750

...
paym = $198.93