A music company offers a loan to buy a drum set for $1500. The simple interest is 11.8% and the loan will be paid in equal monthly payments for 2 years. What is the monthly payment?
Simple interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments. It is expressed as:
I = Prt
I = 1500(.118)(2) = 354
Total amount to pay = $1854 Monthly payment = $77.25
