1. **State the problem:** Calculate the monthly payment on a $62000 business loan with an annual interest rate of 5.46% over 20 years, compounded monthly. 2. **Formula used:** The Excel PMT function calculates the payment for a loan based on constant payments and a constant interest rate: $$\text{PMT} = \frac{r \times PV}{1 - (1 + r)^{-n}}$$ where: - $r$ is the monthly interest rate (annual rate divided by 12), - $PV$ is the present value or loan amount, - $n$ is the total number of payments (months). 3. **Calculate monthly interest rate:** $$r = \frac{5.46}{100 \times 12} = 0.00455$$ 4. **Calculate total number of payments:** $$n = 20 \times 12 = 240$$ 5. **Substitute values into the formula:** $$\text{PMT} = \frac{0.00455 \times 62000}{1 - (1 + 0.00455)^{-240}}$$ 6. **Calculate denominator:** $$1 - (1 + 0.00455)^{-240} = 1 - (1.00455)^{-240}$$ Calculate $(1.00455)^{-240}$: $$ (1.00455)^{240} \approx 3.030 $$ So, $$ (1.00455)^{-240} = \frac{1}{3.030} \approx 0.330 $$ Therefore, $$1 - 0.330 = 0.670$$ 7. **Calculate numerator:** $$0.00455 \times 62000 = 282.1$$ 8. **Calculate monthly payment:** $$\text{PMT} = \frac{282.1}{0.670} \approx 421.04$$ **Final answer:** The monthly payment is approximately 421.04.