Question

i have a loan of 50,000, interest rate of 9%, which compounds monthly for 7 years. what is the monthly payment. please show the formula and variable to calculate the payment. I have been told the answer is 804.45, but I dont know how to come up with that answer

Answer 1

Here is the formula you need.\[P=rPV/(1-(1+r)^{-n})\]

P= payment PV= the loan amount
r= the interest rate per compounding period n=number of periods

So r=.09/12 which is .0075

n=12 times 7 years which is 84

PV = $50,000

So you would have\[P=(50,000)(.0075)/(1-(1+.0075)^{-84})\]

Answer 2

thank u

Answer 3

ok so what would the monthly payment be for that

Answer 4

What is the unpaid balance of the loan at the end of the 1st year?