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26 July, 17:14

Kim has just graduated from law school. she had taken an education loan of $45,000, which now needs to be repaid in equal monthly installments over the next 6 years. what is the amount of the monthly loan payment, if the loan carries a simple annual interest of 5%? use a calculator to make the calculation and round your answer to two decimal places.

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  1. 26 July, 19:51
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    Given:

    Principal / loan: 45,000

    Interest rate: 5% per annum

    Term: 6 years.

    Simple Interest = Principal * interest rate * term

    Simple Interest = 45,000 * 5% * 6

    Simple Interest = 13,500

    45,000 + 13,500 = 58,500 This is the total amount due

    12 months * 6 years = 72 months

    58,500 / 72 = 812.50 monthly payment

    Kim must pay $812.50 per month for the next 6 years.
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