Answer:
Monthly payments=$513.72
Explanation:
The formula for calculating the compound interest is given as;
A=P(1+r/n)^nt
where;
A-Amount to be paid after a given period of time
P-Principal amount initially taken=$23,000
r-The annual interest rate=5.87%=5.87/100=0.0587
n-Number of times the interest is to be compounded per unit time=12
t-5
Replacing;
A=23000(1+0.0587/12)^(5×12)
A=23000(1.0049)^(5×12)
A=30,823.54
The total amount after 60 months or 5 years=$30,823.54
To meet the target of $30,823.54 in 5 years= Monthly payments=(30,823.54/60)=$513.72
