You have agreed to a $25,000 fixed-rate loan from Valley State today and promise to repay the loan with 24 equal monthly payments at an APR of 7.50%. How large are your monthly payments? Use a financial calculator to determine your answer
A) $1,124.99
B) $1,218.17
C) $1,532.45
D) $1,602.71
Answer: A
Explanation: A) Via financial calculator: PV = -$25,000, I% = 7.50/12, N = 24, FV = 0.
Solve for PMT = $1,124.99.
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What will be an ideal response?
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