The Interest rate on the line of credit is 7.5% compounded monthly Jane and Bill must pay the interest every month, and may pay down the principal when they can. How much must they pay each month? [A3]

## Step 1: Convert the annual interest rate to a monthly rate.### The annual interest rate is 7.5%. To find the monthly rate, divide by 12. .## Step 2: Calculate the monthly interest payment.### The question states Jane and Bill *must pay the interest every month*. It does not specify a principal amount. Let's represent the principal amount as . The monthly interest payment is calculated by multiplying the principal by the monthly interest rate. .