SOLUTION: Jerry goes to the bank and borrows $9000 for farm equipment. The simple yearly interest is 9.5% and he pays off the loan over a 2 year period with 24 equal monthly payments. What i

Algebra ->  Customizable Word Problem Solvers  -> Finance -> SOLUTION: Jerry goes to the bank and borrows $9000 for farm equipment. The simple yearly interest is 9.5% and he pays off the loan over a 2 year period with 24 equal monthly payments. What i      Log On

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Question 1082520: Jerry goes to the bank and borrows $9000 for farm equipment. The simple yearly interest is 9.5% and he pays off the loan over a 2 year period with 24 equal monthly payments. What is Jerry's monthly payment?
A. 375.00
B. 410.63
C. 446.25
D. 892.50
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
the formula for simple interest is i = r*p*n

r is the interest rate per time period.
p is the principal
n is the number of time periods.

the time periods are in months.
the monthly interest rate is 9.5% / 100 / 12 = .007916666.....

the total interest due is .007916666..... * 9000 * 24 = 1710.

add that to the principal and the total amount due is 10710.

divide that by 24 and the monthly payment is 446.25.