Answer:
$908.93
Step-by-step explanation:
-The effective loan amount is :
[tex]Loan \ Amount=185000-12000\\\\=173000[/tex]
#We calculate the effective monthly interest rate:
[tex]r=(1+r_n)^t-1\\\\=(1+0.0492)^{1/12}-1\\\\=0.004010[/tex]
#Now we use the formula below to calculate the monthly payments:
[tex]P=S[\frac{r(1+r)^t}{(1+r)^t-1}][/tex], Where S is the loan amount and P the monthly payments.
Therefore:
[tex]P=S[\frac{r(1+r)^t}{(1+r)^t-1}]\\\\=173000[\frac{0.004010(1+0.004010)^{360}}{(1+0.0040)^{360}-1}]\\\\=908.93[/tex]
Hence, Baggio will make monthly payments of $908.93 each.
