Answer:
D. $870; $31,320 from deposits and $3,680 from interest
Explanation:
In order to calculate the monthly payment, we use the formula below:
[tex]P=\frac{A\mleft(\frac{r}{n}\mright)}{\mleft[\mleft(1+\frac{r}{n}\mright)^{nt}-1\mright]}[/tex]
Given:
• The Financial Goal, A= $35,000
,
• Rate = 7.5% = 0.075
,
• Number of compounding period = 12 (Monthly)
,
• Time, t = 3 years
Substitute into the given formula:
[tex]\begin{gathered} P=\frac{35000\mleft(\frac{0.075}{12}\mright)}{\mleft[\mleft(1+\frac{0.075}{12}\mright)^{12\times3}-1\mright]} \\ P\approx\$870 \end{gathered}[/tex]
The monthly payment is $870.
[tex]\begin{gathered} \text{Total deposit}=870\times36=31,320 \\ \text{Interests}=35,000-31,320=3680 \end{gathered}[/tex]
Option D is correct.
