document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=117481>Question 117481</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Please help me with this question:<BR>\n" );
document.write( "Interest on a twelve-month installment loan is to be calculated using the discount nethod. If the purchase to be financed is $1,000 and the discount rate is 6%, then your monthly payment is what? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #86557 by </B><A HREF=/tutors/aboutme.mpl?userid=tutor_paul><B>tutor_paul(519)</B></A><img src=\"/images/stars/stars-10.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=tutor_paul><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=tutor_paul><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=86557\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> First, calculate the total interest you have to pay:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=I=A%2Ai%2AN ALIGN=MIDDLE  ALT=\"I=A%2Ai%2AN\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "where:<BR>\n" );
document.write( "I = total amount of interest paid<BR>\n" );
document.write( "A = loan amount<BR>\n" );
document.write( "i = interest rate per time period<BR>\n" );
document.write( "N = number of time periods covered by the loan\r<BR>\n" );
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document.write( "So in your case:<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=I=%281000%29%2A0.06%2A1 ALIGN=MIDDLE  ALT=\"I=%281000%29%2A0.06%2A1\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=I=60 ALIGN=MIDDLE  ALT=\"I=60\"   DISABLED_style= \"max-width:90%; height:auto;\" >\r<BR>\n" );
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document.write( "Note that for the \"discount method,\" the amount of money you receive as a borrower already has the interest deducted from it. So you will actually be receiving, called the loan proceeds and represented by 'L' is:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=L=1000-60 ALIGN=MIDDLE  ALT=\"L=1000-60\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=L=940 ALIGN=MIDDLE  ALT=\"L=940\"   DISABLED_style= \"max-width:90%; height:auto;\" >\r<BR>\n" );
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document.write( "So even though you got only $940 from the bank, the payments are based on 'A' which is the loan amount of $1000. Since you are repaying this on a 12 month installment loan, the monthly loan payments are:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=Monthly+Payment=1000%2F12 ALIGN=MIDDLE  ALT=\"Monthly+Payment=1000%2F12\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=Monthly+Payment=83.33 ALIGN=MIDDLE  ALT=\"Monthly+Payment=83.33\"   DISABLED_style= \"max-width:90%; height:auto;\" >\r<BR>\n" );
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document.write( "Good Luck,<BR>\n" );
document.write( "tutor_paul@yahoo.com\r<BR>\n" );
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document.write( " </SPAN>\n" );
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