Respuesta :
The approximate monthly payment of Seth is calculated to be $844.99.
Using finite geometric series we get,
18875= [C/(0.116÷12)] ×[1-(1/(1+(0.116÷12))²⁴] , where C is monthly payment.
⇒18875=(C/0.0097)×[1-(1/(1+0.0097)²⁴], here we calculated 0.116/12
⇒18875=(C/0.0097)×[1-(1/(1.0097)²⁴], here we put the value of (1+t)=(1+0.0097)=
⇒18875=(C/0.0097)×[1-(1/1.2607], here we calculated (1+t)ⁿ, n=24
⇒18875=(C/0.0097)×[(1.2607-1)/1.2607]
⇒18875= (C/0.0097)×(0.2067)
⇒(18875×0.0097)÷0.2067=C
⇒C=$885≈$844.99
Thus, monthly payment is approximately $844.99.
We used compound interest here as, credit card companies often tend to use compound interest on daily basis, adding to the principal amount daily, here monthly though. also it forms a Geometric series as difference in amount compounded in first month and then in succeeding months is of r times which is the annual interest rate divided by number of months here.
To learn more about compound interest click here brainly.com/question/24924853
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