The following loan is a simple interest amortized loan with monthly payments. (Round your answers to the nearest cent.) $5000, 8 1 2 %, 4 years (a) Find the monthly payment.

Question

The following loan is a simple interest amortized loan with monthly payments. (Round your answers to the nearest cent.)

$5000, 8

1

2

%, 4 years

(a) Find the monthly payment.

$

(b) Find the total interest.

Answer 1

Use the amortization formula here: https://www.vertex42.com/ExcelArticles/amortization-calculation.html

Note that this is per period which is for our case is per month, so we need to adjust the rate and duration to months.

P=$4000

r=0.085 / 12

t=4*12

Solve for A.