Question

find the final monthly payment required to pay off a loan with a $1400 remaining principal and 18% annual interest rate. $? round to the nearest cent.

Explanation:

Step1: Determine monthly interest rate

The annual interest rate is 18%, so the monthly interest rate \( r \) is \( \frac{0.18}{12} = 0.015 \).

Step2: Assume it's a one - month loan (to pay off)

The formula for the monthly payment (when paying off in one month) is \( P(1 + r) \), where \( P \) is the principal. Here, \( P=\$1400 \) and \( r = 0.015 \).
So the payment \( A=1400\times(1 + 0.015)=1400\times1.015 \)

Step3: Calculate the value

\( 1400\times1.015 = 1421.00 \)

Answer:

\( \$1421.00 \)