Mercedes takes out a loan for $ 10 , 000 at a simple interest rate of 3.5 % to be paid back in 42 monthly installments. What is the amount of the monthly payments?

The amount of monthly installments is $267.30

Step-by-step explanation:

Here, we are interested in calculating the amount of the monthly is installments.

To get the amount of the installments, we need to calculate the sum of the interest and the amount borrowed.

Mathematically,

Simple interest = PRT/100

from the question;

P = principal which is the amount borrowed = $10,000

R = rate = 3.5%

T = time = 42 months = 42/12 = 3.5 years

Substitute these values into the formula for simple interest;

We have ;

S.I = (10,000 * 3.5 * 3.5)/100 = $1,225

So the total amount to

payback = interest + principal = 1225 + 10,000 = 11,225

So the amount of installments will be ;

The amount to payback/number of months

Mathematically that would be ; 11,225/42 = $267.26 which is approximately $267.30 per month

step-by-step explanation:

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