Rhonda borrowed $700 at 9% interest for 12 months under a monthly
installment plan. She must pay $8.7453 per $100 each month for 12
months. How much is her monthly installment payment?
a. $63.00
b. $61.22
c. $734.60
d. $6.12
First, we need to calculate the total amount of interest Rhonda will pay over the 12 months:
Interest = Principal x Rate x Time
Interest = $700 x 0.09 x 1
Interest = $63
So the total amount Rhonda will pay back over the 12 months is:
Total payment = Principal + Interest
Total payment = $700 + $63
Total payment = $763
Now we need to calculate the monthly installment payment. We know that she must pay $8.7453 per $100 each month, so for the full loan amount of $700, her monthly payment would be:
Monthly payment = $8.7453 x 7
Monthly payment = $61.22
Therefore, the answer is b. $61.22.
To calculate Rhonda's monthly installment payment, we need to determine the total amount she borrowed and the total interest charged.
The formula to calculate the total interest is:
Total Interest = Principal Amount x Interest Rate x Time
In this case, the principal amount is $700, the interest rate is 9% (or 0.09), and the time is 12 months.
Total Interest = $700 x 0.09 x 12 = $756
Now, let's calculate the total amount she needs to pay back, including the interest:
Total Amount = Principal Amount + Total Interest
Total Amount = $700 + $756 = $1456
Finally, we divide the total amount by the number of monthly installments to find the monthly payment:
Monthly Payment = Total Amount / Number of Installments
Monthly Payment = $1456 / 12 = $121.33
Considering the options provided, the closest monthly installment payment amount is $121.33, which is not listed. Therefore, none of the given options accurately represents Rhonda's monthly installment payment.
To find Rhonda's monthly installment payment, we need to calculate how much she needs to pay back in total over the 12-month period.
Rhonda borrowed $700 at 9% interest, so the total amount she needs to pay back is the principal plus the interest. The formula to calculate the total amount is:
Total amount = Principal + (Principal * Interest Rate)
So, in this case, the total amount is:
Total amount = $700 + ($700 * 9%) = $700 + ($700 * 0.09) = $700 + $63 = $763
Now, we need to divide the total amount by the number of months (12) to find the monthly installment payment. The formula is:
Monthly installment payment = Total amount / Number of months
So, in this case, the monthly installment payment is:
Monthly installment payment = $763 / 12 ≈ $63.58
Rounding off to two decimal places, Rhonda's monthly installment payment is approximately $63.58.
None of the provided answer options exactly match the calculated monthly installment payment. However, the closest option is:
b. $61.22
Please note that this might be a rounding error in the given answer options, so the correct answer might actually be $63.00.