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

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

anonymous · Answer

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$$P=(50,000)(.0075)/(1-(1+.0075)^{-84})$$

anonymous · Answer

thank u

anonymous · Answer

ok so what would the monthly payment be for that

anonymous · Answer

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