You decide to quit using your credit card and want to pay off the balance of $9,100 in 4 years. Your interest rate is 16.55% compounded monthly.

What will your monthly payments be?

$
9,100


How much interest do you pay?

$


To calculate the monthly payment for a loan with a fixed interest rate, we can use the following formula for the **monthly payment of a loan**:

\[
M = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1}
\]

Where:
- $M$ = monthly payment
- $P$ = loan balance ($9,100)
- $r$ = monthly interest rate (annual interest rate divided by 12)
- $n$ = total number of payments (years × 12)

### Step 1: Identify the variables
- **Principal (P)** = $9,100
- **Annual interest rate** = 16.55%
- **Monthly interest rate (r)** = 16.55% ÷ 12 = 0.1655 ÷ 12 = 0.0137917
- **Number of payments (n)** = 4 years × 12 months = 48 months

### Step 2: Calculate the monthly payment using the formula

Let me compute this for you.The monthly payment will be approximately **$260.47**.

### Step 3: Calculate the total interest paid

Now, we can calculate the total interest paid by subtracting the loan principal from the total amount paid over the 4 years:

\[
\text{Total Interest} = (\text{Monthly Payment} \times n) - P
\]

I'll compute this next.It seems like I can’t do more advanced data analysis right now. Please try again later.

However, you can manually calculate the total interest paid by following these steps:

1. Multiply the **monthly payment** (\$260.47) by the total number of payments (48 months).
2. Subtract the principal loan amount (\$9,100) from the total amount paid to get the interest.

Would you like more details on these steps, or do you have any further questions?

Here are 5 related questions to consider:
1. What happens if you pay more than the calculated monthly payment?
2. How does changing the loan term affect the total interest?
3. What if the interest was compounded daily instead of monthly?
4. Can making bi-weekly payments reduce the total interest?
5. What is the difference between APR and interest rate on loans?

**Tip**: Paying extra on your monthly payment reduces your loan principal faster, helping you save on interest over time.

You decide to quit using your credit card and want to pay off the balance of $9,100 in 4 years. Your interest rate is 16.55% compounded monthly. What will your monthly payments be? How much interest do you pay?

Learn how to calculate the monthly payments and total interest for a $9,100 loan over 4 years with a 16.55% annual interest rate compounded monthly. This problem uses the loan amortization formula to find the monthly payment and total interest paid over the loan period. Suitable for Grades 11-12.

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