Find the monthly payment for a 25-year fixed-rate loan of $200,000 at 5% annual interest.

Expert Solution

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

Where,

EMI= Equal Monthly Payment

P= Loan Amount

R= Interest rate per period =5%/12 =0.4166667%

N= Number of periods =25*12 =300

= [ $200000x0.0041666667 x (1+0.0041666667)^300]/[(1+0.0041666667)^300 -1]

= [ $833.33334( 1.0041666667 )^300] / [(1.0041666667 )^300 -1

=$1169.18

jeff jeffy answered 3 years ago

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