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Katie's Dinor spent $113,800 to refurbish its current facility. The firm borrowed 65 percent of the refurbishment cost at 6.82 percent interest for six years. What is the amount of each monthly payment?

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Karabo99

Answer:

The amount of each monthly payment is $1,254.72.

Explanation:

Amount Borrowed = 65% ×$113,800 = $73,970

Annual Interest = 6.82%

Monthly Interest Rate = 6.82% / 12 = 0.5683%  

Number of Payments = 12 * 6 = 72

Let $X be the monthly payment.

$73,970 = $X×PVIFA(0.5683%, 72)

73,970 = X×(1-(1/1.005683)^72)/0.005683

73,970 = X×58.9535

X = $1,254.72

Therefore, the amount of each monthly payment is $1,254.72.

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