Question 1157594
<font color=black size=3>
@Shin123 is unfortunately incorrect.
The expression 34000*(1.02)^4 assumes that the balance isn't decreasing over the 48 months, which is of course the wrong assumption.


The reality is that the balance is steadily decreasing because of the monthly payments (we would hope so or else we'd never be able to pay it off).



The section below shows the proper steps in calculating the monthly payment. You can use a calculator such as this one
<a href = "https://www.calculator.net/loan-calculator.html">https://www.calculator.net/loan-calculator.html</a>
to confirm the answer. It also shows a handy amortization table to determine the remaining balance at any given month.


----------------------------------


L = 34,000 = loan amount
i = interest rate per month = 0.02/12
n = number of months = 48


P = monthly payment
P = (L*i)/( 1-(1+i)^(-n) )
P = (34,000*0.02/12)/( 1-(1+0.02/12)^(-48) )
P = 737.634203737557
P = 737.63


Answer: $737.63
</font>