To calculate the monthly payment, we first need to find the total amount of interest Darren will pay over the 3-year period.
Principal amount: $12,000
Annual interest rate: 3%
Time: 3 years
Interest = Principal x Rate x Time
Interest = $12,000 x 0.03 x 3
Interest = $12,000 x 0.09
Interest = $1,080
Total amount to be repaid = Principal + Interest
Total amount = $12,000 + $1,080
Total amount = $13,080
Now, we need to calculate the monthly payment.
Number of months = 3 years x 12 months/year = 36 months
Monthly payment = Total amount / Number of months
Monthly payment = $13,080 / 36
Monthly payment = $363.33
Therefore, Darren's monthly payment will be $363.33.
So the answer is:
$363.33
Darren is purchasing a car that costs $12,000. He is taking out a simple interest loan at an annual rate of 3%. If he makes monthly payments over a period of 3 years, how much is his monthly payment?
$363.33
$349.12
$333.33
$296.13
1 answer