Sally Ray borrowed $38,000 to buy a new Chevy Volt. Assuming an interest charge of $4,100, what will be her monthly payment if she takes 25 months to repay the loan interest. Assume the loan is repaid in equal payments. A) $1,520 B) $1,684 C) $1,864 D) $1,250 E) None of these

Question

Quizplus · Accepted Answer

To calculate the monthly payment, we need to first find the total amount borrowed by Sally:
Total amount borrowed = Loan amount + Interest charge
Total amount borrowed = $38,000 + $4,100
Total amount borrowed = $42,100

Since Sally takes 25 months to repay the loan, we can use the formula for calculating equal monthly payments for a loan:

Monthly payment = Total amount borrowed / Number of months
Monthly payment = $42,100 / 25
Monthly payment = $1,684

Therefore, Sally's monthly payment will be $1,684. The correct answer is B.

Sally Ray Borrowed $38,000 to Buy a New Chevy