A $14,000 loan at 6% compounded monthly is repaid by monthly payments over four years. a. What is the size of the monthly payment? b. Calculate the principal portion of the 25th payment.
Added by Dawn L.
Step 1
- Principal (P) = $14,000 - Annual interest rate (r) = 6% = 0.06 - Compounded monthly, so the monthly interest rate (i) = 0.06 / 12 = 0.005 - Loan term = 4 years = 4 × 12 = 48 months Show more…
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