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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

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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.

jeff jeffy answered 2 years ago
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