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Megan took out a loan of $85,600 at an interest rate of 11.5%, compounded monthly. She paid off the loan in full over the course of exactly twelve years. Assuming that Megan made the same payment every month for twelve years, what was her monthly payment? a. $1,125.03 b. $629.52 c. $1,098.52 d. $820.33

Verified Answer :

SharpestoftheBlades

The answer is C $1,098.52...because I got it right

aabdulsamir

Principal (p) = $85600

Rate (r) = 11.5%

Time = 12 years

Interval = monthly = 12 months

Compound interest (A) = P * (1 + r/n)^nt

A = 85600 * [ 1 + (0.115 / 12)] ^ 12 * 12

A = 85600 * [1 + 0.009583]^144

A = 85600 * [1.009583]¹⁴⁴

A = 85600 * 3.95

A = $338120

She's supposed to pay $338120 compounded into (12months * 12 years) = 144 months

Every month she pays 338120 / 144 = $2348.05.

Every month she pays $2358.05

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