Answer: her monthly payment will be $93.84
Step-by-step explanation:
The balance to be paid would be
3500 - 500 = $3000
We would apply the periodic interest rate formula which is expressed as
P = a/[{(1+r)^n]-1}/{r(1+r)^n}]
Where
P represents the monthly payments.
a represents the amount of the loan
r represents the annual rate.
n represents number of monthly payments. Therefore
a = $3000
r = 0.08/12 = 0.0067
n = 12 × 3 = 36
Therefore,
P = 3000/[{(1+0.0067)^36]-1}/{0.0067(1+0.0067)^36}]
3000/[{(1.0067)^36]-1}/{0.0067(1.0067)^36}]
P = 3000/{1.272 -1}/[0.0067(1.272)]
P = 3000/(0.272/0.0085224)
P = 3000/31.92
P = $93.84
