Determine the monthly payment for the installment loan.
Amount Financed​ (P)
Annual Percentage Rate​ (r)
Number of Payments per Year​ (n)
Time in Years​ (t)
​$16 comma 000
5.5​%
12
5
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Part 1
The monthly payment is ​$

enter your response here.

To calculate the monthly payment for an installment loan, we use the following formula:

\[
M = \frac{P \cdot \left( \frac{r}{n} \right)}{1 - \left( 1 + \frac{r}{n} \right)^{-nt}}
\]

Where:  
- $ M $ is the monthly payment  
- $ P $ is the amount financed  
- $ r $ is the annual percentage rate (as a decimal)  
- $ n $ is the number of payments per year  
- $ t $ is the time in years  

### Given:
- $ P = 16,000 $
- $ r = 5.5\% = 0.055 $
- $ n = 12 $
- $ t = 5 $

Now, let's plug in these values into the formula:

\[
M = \frac{16,000 \cdot \left( \frac{0.055}{12} \right)}{1 - \left( 1 + \frac{0.055}{12} \right)^{-12 \cdot 5}}
\]

I will calculate this for you.The monthly payment for the installment loan is approximately **$305.62**.

Would you like more details on how this was calculated, or have any questions?

Here are five related questions for further understanding:
1. How does the interest rate affect the monthly payment of a loan?
2. What happens to the monthly payment if the loan term increases?
3. How would the payment change if the loan had a 7% APR instead of 5.5%?
4. Can you compare this method with other loan repayment strategies?
5. What is the total amount paid over the lifetime of the loan?

**Tip:** Reducing the loan term decreases the total interest paid, even though the monthly payments may be higher.

Determine the monthly payment for the installment loan. Amount Financed​ (P) = $16,000, Annual Percentage Rate​ (r) = 5.5%, Number of Payments per Year​ (n) = 12, Time in Years​ (t) = 5.

Learn how to calculate the monthly payment for an installment loan of $16,000 with a 5.5% annual percentage rate (APR) over a 5-year term, making 12 payments per year. The solution includes detailed steps, formulas, and explanations for finance math concepts.

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