From the statement, we know that:
• John takes a loan for A₀ = $12,000,
,• at a simple interest rate of r = 7.9% = 0.079per year,
,• to be paid back in 36 monthly instalments.
1) The total amount to be paid is given by:
[tex]A=A_0\cdot(1+r\cdot n_{years})=\text{\$12,000}\cdot(1+0.079\cdot3)=\text{\$14,844.}[/tex]2) The monthly payments are given by:
[tex]m=\frac{A}{n_{months}}=\frac{\text{\$14,844}}{36}\cong\text{\$412.33.}[/tex]AnswerThe monthly payments are $412.33.
