Answer:
Option b - $163.07
Step-by-step explanation:
Given : A loan of $7,500 with an 11% interest rate compounded monthly over a period of 5 years.
To find : Monthly payment
Solution : Formula to find monthly payment
Monthly Payment = Amount / Discount factor
Discount factor \(D=\frac{1-(1+i)^{-n}}{i}\)
where ,
Amount = $7500
Rate= 11%=0.11
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Time = 5 years
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Now, put i and n in Discount factor ,
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Monthly payment,
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Therefore, Option b is correct monthly payment = $163.07
