A store offers a loan of $900 to buy a computer. The terms of the loan are for 5% simple interest and equal monthly payments for three years. What is the monthly payment?

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Mathematics

Guest

30 December, 06:24

A store offers a loan of $900 to buy a computer. The terms of the loan are for 5% simple interest and equal monthly payments for three years. What is the monthly payment?

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Jackson · Answer 1

Interest Amount (I) = P x r x t = 900 x 5% x 3 = 135

So total amount to be paid over 3 years = Principal Amount + Interest Amount = 135 + 900 = 1035 (over 3 years = 36 months) = 1035 / 36 = $28.75 per month