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Isaac owes \$8,100$8,100 on his credit card. The bank charges an annual interest rate of 21.9%, compounded monthly. If Isaac wants to pay off his credit card using equal monthly payments over the next 16 months, what would the monthly payment be, to the nearest dollar?

Sagot :

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Answer:

[tex]M=\$605.58[/tex]

Step-by-step explanation:

From the question we are told that:

Issac's Debit [tex]P=\$8100[/tex]

Annual interest rate  [tex]r=21.9\%[/tex]

Number of payments [tex]n=16[/tex]

 

Generally the equation for Monthly payment  is mathematically given by

 [tex]M=\frac{Pr}{1-(1+r)^-^n}[/tex]

 [tex]M=\frac{1800*0.0219}{1-(1+0.0219)^-^{16}}[/tex]

 [tex]M=\$605.58[/tex]

Therefore Payment for each month is given as

 [tex]M=\$605.58[/tex]

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