Question

A investor's price for a townhouse was $8560 .The buyers of the rental unit financed it by a 36 month loan at 9% interest compounded monthly.What is the amount of each monthly payment and the total interest cost of financing?

Answer 1

Let $X$ be the monthly payment

We are given interest rate of 9% compounded monthly.To get monthly interest rate we divide yearly interest rate by 12.

(9÷12)%=0.75%=0.0075

$8560=X({1-(1.0075)^{-36} \over 0.0075})$

$8560=31.4468X \implies X=272.2057$