Answered: Find the monthly payment for the loan…

Find the monthly payment for the loan indicated. (Round your final answer to two decimal places.) Amount of loan = $10,500 at an annual interest rate of 5.7% for 6 years

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 6FPE

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

100%

Find the monthly payment for the loan indicated. (Round your final answer to two decimal places.)

Amount of loan = $10,500 at an annual interest rate of 5.7% for 6 years.

Expert Solution

Step 1

Formula to calculate EMI:

EMI= (P X R/12) X [(1+R/12) ^N] / [(1+R/12) ^N-1]

Wherein:

P = Loan Amount $10,500

R = 5.7%

N = no. of monthly payment = 6*12 = 72

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