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QuizMultiple Choice

Amortization

Question 1 • FT GMS AMDM B IC – 72

Using technology, determine the monthly payment on a 6 year loan of $15,250 at 3.5% compounded monthly. Round your answer to the nearest cent.

Answer
A
$234.75
B
$235.13
C
$582.70
D
$590.05

Explanation

Use the monthly loan-payment formula: payment = 15,250(0.035/12) ÷ [1 − (1 + 0.035/12)^−72]. There are 72 monthly payments, and the monthly interest rate is 0.035/12. Evaluating gives about $235.13 per month, so the correct choice is b. $235.13.

AI-written and checked against the verified answer.

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