What amortization payment would you need to make every month, at 12% interest compounded monthly, to pay off a loan of $8,500 in 3 years? (Use Table 12-2 from your text)
A) $3,538.97
B) $282.32
C) $197.32
D) $279.53

Question

Quizplus · Accepted Answer

The correct monthly amortization payment to pay off a loan of $8,500 at 12% interest compounded monthly over 3 years is $282.32. This can be calculated using the formula for monthly payments on an amortizing loan or by looking up the appropriate factor in Table 12-2 for a 12% annual interest rate compounded monthly over 36 months and multiplying it by the principal amount of $8,500.

What Amortization Payment Would You Need to Make Every Month