1. **Problem Statement:** Tom borrowed 48500 at an annual interest rate of 6.85% for 6 years with monthly payments. We need to find: (a) Monthly payment (b) Total payment over the loan term (c) Total interest paid 2. **Formula for monthly payment of an amortized loan:** $$P = \frac{r \times PV}{1 - (1 + r)^{-n}}$$ where: - $P$ = monthly payment - $PV$ = loan principal = 48500 - $r$ = monthly interest rate = $\frac{6.85}{100 \times 12} = 0.0057083333$ - $n$ = total number of payments = $6 \times 12 = 72$ 3. **Calculate monthly payment:** $$P = \frac{0.0057083333 \times 48500}{1 - (1 + 0.0057083333)^{-72}}$$ Calculate denominator term: $$1 + 0.0057083333 = 1.0057083333$$ $$1.0057083333^{-72} = \frac{1}{1.0057083333^{72}}$$ Calculate $1.0057083333^{72}$: $$1.0057083333^{72} \approx 1.489349$$ So: $$1.0057083333^{-72} = \frac{1}{1.489349} \approx 0.6715$$ Denominator: $$1 - 0.6715 = 0.3285$$ Numerator: $$0.0057083333 \times 48500 = 276.645833$$ Monthly payment: $$P = \frac{276.645833}{0.3285} \approx 841.91$$ 4. **Total payment over the loan term:** $$\text{Total payment} = P \times n = 841.91 \times 72 = 60617.52$$ 5. **Total interest paid:** $$\text{Interest} = \text{Total payment} - \text{Principal} = 60617.52 - 48500 = 12117.52$$ **Final answers:** (a) Monthly payment = $841.91$ (b) Total payment = $60617.52$ (c) Total interest = $12117.52$