Chiara purchased a new natural gas barbecue for $2,500 and made a down payment that was 30% of the purchase price. She financed the remaining balance for 9 months at an annual interest rate of 5.5% compounded monthly. What is Chiara's monthly payment? (Round your answer to the nearest cent.)

I totally disagree with the previous post.

amount still outstanding = 1750
i = .055/12 = .00458333...
n = 9
paym = ?

paym(1 - 1.00458333...^-9)/.00458333... = 1750

...
paym = $198.93

To find Chiara's monthly payment, we need to calculate the remaining balance on her barbecue after the down payment and then determine the monthly payments.

The down payment is 30% of the purchase price, which is 30/100 * $2,500 = $750.
So the remaining balance is $2,500 - $750 = $1,750.

To find the monthly payment, we can use the formula for the monthly payment on a loan:

M = P * r * (1 + r)^n / ((1 + r)^n - 1)

Where:
M = monthly payment
P = principal balance (remaining balance)
r = monthly interest rate
n = number of payments

The monthly interest rate is calculated as the annual interest rate divided by 12 months:
r = 5.5% / 12 = 0.055 / 12 = 0.00458

The number of payments is 9 since the loan term is 9 months:
n = 9

Substituting these values into the formula:
M = $1,750 * 0.00458 * (1 + 0.00458)^9 / ((1 + 0.00458)^9 - 1)

Using a calculator to solve this equation, we find that:
M ≈ $203.83

Therefore, Chiara's monthly payment is approximately $203.83.

To calculate Chiara's monthly payment, we need to first determine the amount she financed after making the down payment.

Step 1: Calculate the down payment amount
The down payment is 30% of the purchase price, so we need to find 30% of $2,500:
Down payment = 30% * $2,500 = $750

Step 2: Calculate the amount financed
The amount financed is the purchase price minus the down payment:
Amount financed = Purchase price - Down payment
Amount financed = $2,500 - $750
Amount financed = $1,750

Step 3: Calculate the monthly interest rate
The annual interest rate is 5.5%, but since it's compounded monthly, we need to calculate the monthly interest rate by dividing it by 12:
Monthly interest rate = Annual interest rate / 12
Monthly interest rate = 5.5% / 12
Monthly interest rate = 0.455%

Step 4: Calculate the number of months
Since Chiara financed the remaining balance for 9 months, we already have this value.

Step 5: Calculate the monthly payment
To calculate the monthly payment, we can use the formula for the monthly payment on a loan:

Monthly payment = (Amount financed * Monthly interest rate) / (1 - (1 + Monthly interest rate) ^ -Number of months)

Substituting the values we've calculated:
Monthly payment = ($1,750 * 0.455%) / (1 - (1 + 0.455%) ^ -9)

We can plug this equation into a calculator or spreadsheet to find the solution.

I will calculate the monthly payment for you.

2,500-0.3*2,500 = $1750 financed.

P = Po(1+r)^n.
r = 0.055/12 = 0.00458.
n = 9 compounding periods.
P 1750(1.00458)^9 = $1823.47.
1823.47/9 = $__ = monthly payment.