Question

Maribel was approved for a 7-year private student loan at 6.8% to cover her college costs of $10,900. (Round monthly payment calculations to 2 decimal places.)

Answer 1

Using it's formula, it is found that her monthly payment for the loan will be of $163.45.

What is the monthly payment formula?

It is given by:

$A = P\frac{\frac{r}{12}\left(1 + \frac{r}{12}\right)^n}{\left(1 + \frac{r}{12}\right)^n - 1}$

In which:

• P is the initial amount.

• r is the interest rate.

• n is the number of payments.

In this problem, the parameters are given as follows:

P = 10900, r = 0.068, n = 7 x 12 = 84.

Hence:

r/12 = 0.068/12 = 0.005667.

Hence the monthly payment will be given by:

$A = P\frac{\frac{r}{12}\left(1 + \frac{r}{12}\right)^n}{\left(1 + \frac{r}{12}\right)^n - 1}$

$A = 10900\frac{0.005667(1 + 0.005667)^{84}}{(1 + 0.005667)^{84} - 1}$

A = 163.45.

More can be learned about the monthly payment formula at https://brainly.com/question/22846480

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