Using technology, determine the monthly payment on a 35 month loan of $28,000 at 8.1% compounded annually. Round you answer to the nearest cent.

a.

$900.90

c.

$1,102.94

b.

$875.02

d.

$1,012.10

Present Value of an annuity is given by the formular

PV = P (1 - (1 + r) ^-n) / r; where PV = $28,000, r = 0.081/12 = 0.00675, n = 35 and P is the periodic (monthly) payment.

P = PVr / (1 - (1 + r) ^-n) = (28,000 x 0.00675) / (1 - (1 + 0.00675) ^-35) = 189/0.2098 = 900.90

Therefore, the monthly payment is $900.90