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Question 9 (7 points) Adam borrows $6000 for two years at an 8% annual interest rate, what is his monthly payment? A. $250 D. $522 B. $271 C.$290 E. None of these

Respuesta :

Answer:

B. $271

Step-by-step explanation:

Given,

Present value of the loan, PV = $ 6000,

Annual rate of interest = 8 % = 0.08,

So, the monthly rate of interest, r = [tex]\frac{0.08}{12}[/tex],

Also, time = 2 years,

So, the total number of months, n = 24,

Hence, the monthly payment would be,

[tex]A=\frac{PV(r)}{1-(1+r)^{-n}}[/tex]

[tex]=\frac{6000(\frac{0.08}{12})}{1-(1+\frac{0.08}{12})^{-24}}[/tex]

[tex]=\$271.363748737[/tex]

[tex]\approx \$271[/tex]

Option B is correct.