Question 2 • 26-27 Ignite Technical Math-Financial Math - MA2007
Use the fixed-payment loan formula with monthly interest rate 0.19 ÷ 12 and 8 payments. The monthly payment is proportional to the starting balance, so reducing the balance by $2,000 lowers the payment by $2,000 × [(0.19 ÷ 12) ÷ (1 − (1 + 0.19 ÷ 12)^−8)] ≈ $268.14. Thus the reduction is $268.14, choice B.
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