math homework APR

Question

Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those presented here. For long-term loans, the differences may be pronounced.

Use this Monthly Payments for Short-Term Loans Rule of Thumb to estimate the monthly payment on a loan of $5000 borrowed over a two-year period. (Round your answer to the nearest cent.)

The monthly payment is at least $ 

Answer 1

The "Rule of Thumb" stated here is just to figure out what the payment would be per month if there's no interest. So we just divide the dollar amount by the number of months and round to the nearest cent:

$5000/24=$208.33.

Hope that helps!