You have agreed to a $40,000 fixed-rate loan from Chase Bank today and promise to repay the loan with 36 equal monthly payments at an APR of 5.50%.How large are your monthly payments? Use a financial calculator to determine your answer.

Question

Quizplus · Accepted Answer

Using a financial calculator, inputting the values:
- Present Value (PV) = -$40,000 (since it's a loan, money is going out)
- Interest Rate (I/Y) = 5.50% / 12 months = 0.4583% per month
- Number of Payments (N) = 36
- Payment Amount (PMT) = ?
Solving for PMT results in $1,207.84, which is closest to choice A.

You Have Agreed to a $40,000 Fixed-Rate Loan from Chase