How to Calculate Monthly Payment for a Loan

What was Joanne's monthly payment for the new boat she bought? The total cost of the boat is paid partly by Joanne's down payment and partly by the bank loan. Including finance charges, she must pay back a total of $16,400.16 over 48 months, resulting in a monthly payment of approximately $341.67. None of the provided options correctly state this amount.

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.

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