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24 May, 00:24

A music company offers a loan to buy a drum set for $1500. The simple interest is 11.8% and the loan will be paid in equal monthly payments for 2 years. What is the monthly payment?

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  1. 24 May, 00:26
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    Simple interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments. It is expressed as:

    I = Prt

    I = 1500 (.118) (2) = 354

    Total amount to pay = $1854

    Monthly payment = $77.25

    Hope this answers the question. Have a nice day.
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