1. **State the problem:** You want to borrow 40000 at an interest rate of 0.7% per month for 48 months, and you need to find the equal monthly payment amount. 2. **Formula used:** The monthly payment for a loan with fixed payments is given by the amortization formula: $$ P = \frac{r \times PV}{1 - (1 + r)^{-n}} $$ where: - $P$ is the monthly payment, - $r$ is the monthly interest rate (as a decimal), - $PV$ is the present value or loan amount, - $n$ is the total number of payments. 3. **Identify values:** - $PV = 40000$ - $r = 0.7\% = 0.007$ - $n = 48$ 4. **Calculate the denominator:** $$ 1 - (1 + r)^{-n} = 1 - (1 + 0.007)^{-48} = 1 - (1.007)^{-48} $$ 5. Calculate $(1.007)^{48}$ first: $$ (1.007)^{48} \approx 1.395857 $$ 6. Then: $$ (1.007)^{-48} = \frac{1}{1.395857} \approx 0.7165 $$ 7. So denominator: $$ 1 - 0.7165 = 0.2835 $$ 8. **Calculate numerator:** $$ r \times PV = 0.007 \times 40000 = 280 $$ 9. **Calculate payment:** $$ P = \frac{280}{0.2835} \approx 987.88 $$ 10. **Final answer:** Your monthly payment will be **987.88**.