Liam had an extension built onto his home.He financed it for 48 months with a loan at 4.9% APR.His monthly payments were $750.How much was the loan amount for this extension?
A)$32,631
B)$34,842
C)$36,000
D)$38,420
E)$37,764

Question

Quizplus · Accepted Answer

The correct answer is A.The loan amount can be calculated using the formula:Loan amount = Monthly payment * (1 - (1 + (APR/12))^(-n)) / (APR/12)where:Monthly payment = $750APR = 4.9%n = 48 monthsSubstituting these values into the formula, we get:Loan amount = $750 * (1 - (1 + (0.049/12))^(-48)) / (0.049/12)= $750 * (1 - (1.004083333)^(-48)) / 0.004083333= $750 * (1 - 0.854700855) / 0.004083333= $750 * 0.145299145 / 0.004083333= $32,631.00Therefore, the loan amount for the extension was $32,631.

Liam Had an Extension Built onto His Home