A $6,500 loan at 11.25% compounded monthly is to be repaid by three equal payments due 3, 6, and 12 months after the date of the loan. Calculate the size of each payment.

Compounded Monthly

A process where the interest earned on an investment is calculated and added to the principal each month, thus earning interest on interest.

Equal Payments

Regular payments of the same amount over a specified period.

Conduct calculations with compound interest rate formulas to discern future and present values of investments and loans.
Determine the payments required for loans with diverse terms, including changeable interest rates and disparate sizes of payments.

Verified Answer

Final Answer :

$2,311.51

Learning Objectives

Conduct calculations with compound interest rate formulas to discern future and present values of investments and loans.
Determine the payments required for loans with diverse terms, including changeable interest rates and disparate sizes of payments.