Answer:
The monthly payment needed to be made every month is $745.36.
Step-by-step explanation:
The formula to compute the loan payment is: [tex]P=\frac{PV\times r}{1-(1+r)^{-n}}[/tex]
Here,
P = Loan payment
PV = Present value
r = interest rate
n = number of periods.
Given:
PV = $38,000, r = 0.55% and n = 60
The monthly loan payment is:
[tex]P=\frac{PV\times r}{1-(1+r)^{-n}}\\=\frac{38000\times0.0055}{1-(1+0.0055)^{-60}} \\=745.36[/tex]
Thus, the monthly payment needed to be made every month is $745.36.