You have to take out a $60,000 loan for a new fishing boat. Your terms are 7% APR for 36 months. How much are the monthly payments on this loan?

a. $1,783.33

b. $1,852.62

c. $1,796.54

d. $1,666.66

A loan provides the borrower with funds needed to purchase an object such as a fishing boat. The borrower will be required to make payments to the lender in installments to partly reduce the principal amount and in addition pay interest on the unpaid loan balance. The payments can be made each month over the life period of the loan. We apply the theory of the time value of money in calculating the payments as the loan is assumed to be the current worth of the payments.

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Given P loon amount 60000 I 7 7112 monthly inte... View the full answer