document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1173024>Question 1173024</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Chuck Wells is planning to buy a Winnebago motor home. The listed price is $155,000. Chuck can get a secured add-on interest loan from his bank at 7.45% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $3,600 per month and amortize the loan in 42 months.\r<BR>\n" );
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document.write( "Find Chuck's monthly payment (in $) with these conditions. (Round your answer to the nearest cent.)\r<BR>\n" );
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document.write( "I got the number of payments 60 x 12 = 720<BR>\n" );
document.write( "and i did 0.15/12 = 0.0125 for the monthly rate\r<BR>\n" );
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document.write( "but not sure how to continue from there. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #850788 by </B><A HREF=/tutors/aboutme.mpl?userid=CPhill><B>CPhill(1959)</B></A><img src=\"/images/stars/stars-12.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=CPhill><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=CPhill><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=850788\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Here's how to calculate Chuck's monthly payment:\r<BR>\n" );
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document.write( "**1. Calculate the Down Payment:**\r<BR>\n" );
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document.write( "* Down payment = 15% of $155,000 = $23,250\r<BR>\n" );
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document.write( "**2. Calculate the Loan Amount:**\r<BR>\n" );
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document.write( "* Loan amount = $155,000 - $23,250 = $131,750\r<BR>\n" );
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document.write( "**3. Calculate the Monthly Interest Rate:**\r<BR>\n" );
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document.write( "* Monthly interest rate = Annual interest rate / 12<BR>\n" );
document.write( "* Monthly interest rate = 7.45% / 12 = 0.0745 / 12 = 0.00620833 (approximately)\r<BR>\n" );
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document.write( "**4. Calculate the Monthly Payment:**\r<BR>\n" );
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document.write( "* We'll use the loan payment formula:<BR>\n" );
document.write( "    * M = P [ i(1 + i)^n ] / [ (1 + i)^n  -  1]<BR>\n" );
document.write( "    * Where:<BR>\n" );
document.write( "        * M = Monthly payment<BR>\n" );
document.write( "        * P = Principal loan amount ($131,750)<BR>\n" );
document.write( "        * i = Monthly interest rate (0.00620833)<BR>\n" );
document.write( "        * n = Total number of payments (42 months)\r<BR>\n" );
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document.write( "* M = $131,750 [ 0.00620833(1 + 0.00620833)^42 ] / [ (1 + 0.00620833)^42  -  1]<BR>\n" );
document.write( "* M = $131,750 [ 0.00620833(1.298715) ] / [ 1.298715  -  1]<BR>\n" );
document.write( "* M = $131,750 [ 0.0080628 ] / [ 0.298715 ]<BR>\n" );
document.write( "* M = $131,750 * 0.026991<BR>\n" );
document.write( "* M = $3556.34 (approximately)\r<BR>\n" );
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document.write( "**Therefore, Chuck's monthly payment would be approximately $3,573.30**<BR>\n" );
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