Jenny purchases a piano for rm 7000. She pays down payment of rm 2000 and agrees to pay the balance in 15 equal monthly payments, the first due in one month. If the dealer charges her 5% compounded monthly , find her monthly payment.

Answer 1

P = Po(1+r)^n.

Po = 7000 - 2000 = $5000.

r = 0.05/12mo. = 0.00417/mo.

n = 1Comp./mo. * 15mo. = 15 Compounding periods.

P/15 = Monthly payment.