How to Calculate Monthly Payment for a Loan
Loan Payment Calculation
Joanne bought a new boat for $14,500 and made a down payment of $2,500. So, the loan amount from the bank will be the total cost of the boat minus the down payment which is $14,500 - $2,500 = $12,000. Including the finance charges, the total amount to be repaid will be $12,000 + $4,400.16 = $16,400.16.
This question relates to financial mathematics, specifically calculating the monthly payment for a loan. As the loan term is 48 months, her monthly payment will be the total amount to be repaid divided by the loan term in months. Thus, $16,400.16 / 48 = $341.67. The answer closest to this is not listed. Therefore, none of the provided options A) $350, B) $275, C) $325, D) $400 are correct.
It's important to understand the calculations involved in loan payments, as they can have a significant impact on your financial situation. By knowing how to calculate your monthly payments accurately, you can better manage your finances and plan for the future.