On their website, they describe the terms of a $2600 installment loan at an effective APR of 139.13% (compounded monthly). The actual terms of the loan are a principal amount borrowed of $2600 with a $75 origination fee at 135% APR compounded monthly paid back over 47 monthly payments. In your calculations, use Y = 47/12 or 3.916667. PMT= P(APR/n)/[1-(1+APR/n)^(-nY)] a. Calculate the monthly payment for a $2600 loan at 135% APR over 47 months. Monthly Payment: $ _____________ b. Compute the total of all payments, not including the $75 loan fee. (Use your rounded answer from part a.) Total Payments: $ _____________ c. How much of the total payments (answer to part b) is interest?
Cash Call is a popular payday loan company offering consumer loans in person or online.
On their website, they describe the terms of a $2600 installment loan at an effective APR of 139.13% (compounded monthly). The actual terms of the loan are a principal amount borrowed of $2600 with a $75 origination fee at 135% APR compounded monthly paid back over 47 monthly payments.
In your calculations, use Y = 47/12 or 3.916667.
PMT= P(APR/n)/[1-(1+APR/n)^(-nY)]
a. Calculate the monthly payment for a $2600 loan at 135% APR over 47 months.
Monthly Payment: $ _____________
b. Compute the total of all payments, not including the $75 loan fee. (Use your rounded answer from part a.)
Total Payments: $ _____________
c. How much of the total payments (answer to part b) is interest?
Interest: $ _____________
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