Eliza borriws 25,000 and agrees to cancel her debt by paying equal sums at the.end of each month for 1 year. Find her monthly payment if interest is 6% compounded monthly.

Answer 1

P = Po(1+r)^n.

Po = $25,000.

r = 0.06/12mo. = 0.005/mo.

n = 1Comp./mo. * 12mo. = 12 Compounding periods.

t = 12 mo.

P/t = Monthly payment.