Question
In: Finance
With a 12-year loan of 13% annual interest rate compoundedmonthly, how much is the monthly...
With a 12-year loan of 13% annual interest rate compounded monthly, how much is the monthly loan payment of $841,590
Solutions
Expert Solution
| This can be solved using the Present value of the annuity formula |
| Present value of annuity is = P*(1-(1+r)^-n)/r |
| "P" is Monthly payment = ? |
| Present value of annuity is = Loan = $ 841,590. |
| "n" is No of months = 12*12 = 144 |
| "r" is Interest rate per year = 13%/12 = 1.083333% |
| 841590=P*(1-(1+0.01083333)^-144)/0.01083333 |
| 841590=P*72.7471132 |
| P is = (841590/72.7471132) |
| P is = $ 11,568.71/. |
| The monthly loan payment is $ 11,568.71. |
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