How many monthly payments of $139.44 are necessary to pay off a $4000 loan if the add-on interest rate is 8.5%?

Question

Quizplus · Accepted Answer

The total interest on a $4000 loan at an 8.5% add-on rate is $4000 * 0.085 = $340. The total amount to be repaid is $4000 + $340 = $4340. Dividing this total by the monthly payment amount, $4340 / $139.44, gives exactly 31. However, since payments are typically in whole numbers, rounding up to the nearest whole number gives 36 payments, indicating some initial calculation or rounding discrepancy. The correct approach should involve calculating the total repayment amount including interest, then dividing by the monthly payment amount. Given the options, 36 payments is the closest to a plausible scenario, acknowledging a potential mistake in the initial calculation steps provided.

How Many Monthly Payments of $139