Respuesta :
The value of interest rate in calculating the monthly payment for a loan is 0.0071.
What is compound interest?
Compound interest is the amount charged on the principal amount and the accumulated interest with a fixed rate of interest for a time period.
The formula for the final amount with the compound interest formula can be given as,
[tex]A=P\times\left(1+\dfrac{r}{n\times100}\right)^{nt}\\[/tex]
Here, A is the final amount (principal plus interest amount) on the principal amount P of with the rate r of in the time period of t.
The interest rate per period, as it appears in the following formula
[tex]P=PV\times\dfrac{i}{1-(1+i)^{-n}}[/tex]
The rate of interest is 8.5%. It hast to be divided with 12 months and 100 to use for the above formula. Therefore, interest rate monthly compounded is,
[tex]i=\dfrac{8.5}{100\times12}\\i=0.0070833\\i\cong0.0071[/tex]
Hence, the value of interest rate in calculating the monthly payment for a loan is 0.0071.
Learn more about the compound interest here;
https://brainly.com/question/24274034
