mortimer takes out a car loan that changes 12.5% interest monthly. the loan was for $8,000

Question

mortimer takes out a car loan that changes 12.5% interest monthly. the loan was for $8,000

A. write an equation to express the amount owed after (X) months?

B. if mortimer doesn't make a payment for 9 months, how much will he owe?

Answer 1

I'm assuming that the 12.5% interest is COMPOUNDED monthly... 

 

Use the compound interest formula:

A = P(1 + r/n)^(nt)

 

P is the principal (8000), r is the rate in decimal (0.125), n is the number of compoundings in 1 year (12), and t is the number of years (9/12=0.75).

 

Punch all of that in, and you should get $8782.0215.