The owner of a flower shop needs a short-term loan to tide her business over until she
completes the sale of some unused property. She asks the bank for a $25,000 six-month
loan. The bank agrees to give her the loan, but it attaches a hefty interest rate of 18 percent
Calculate the monthly payment and explain how the florist can handle taking this loan.

$4,541.67 per month.

Explanation:

From the question above, we see that the interest rate is 18%, therefore:

0.18 X 25,000 = 4,500 interest for one year.

But the loan is for 6months, that's half a year, therefore we have:

4,500 / 2 = 2,250 will be paid as interest for 6months.

The total amount paid monthly will therefore be spread evenly over 6months thus:

(2,250 + 25,000) / 6 = $4,541.67 will be paid per month.

The florist can handle this loan because she wants to complete the sale of an unused property.

forbearance of student loan payments. under forbearance, your loan payments are postponed (or reduced) but interest continues to accrue during the period of forbearance. if you don't pay the interest during that period, the interest may be “capitalized,” which means it is added to your principal balance.

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