How to calculate the number of periods needed to pay back a loanon a calculator?...

How to calculate the number of periods needed to pay back a loan on a calculator? Cash flow is $1000, Monthly rate 0.45%, present value $48288.83.

Expert Solution

Loan amount = Sum of Present value of all the monthly payment discounted at monthly rate.

4y8288.83 = 1000 * (1/(1+0.0045)^1 + 1/(1+0.0045)^2 +1/(1+0.0045)^3 +1/(1+0.0045)^4 +1/(1+0.0045)^5 +1/(1+0.0045)^6 +.............. 1/(1+0.0045)^n

On solving above equation

N = number of periods = 54.57

Or using Financial calculator,

FV = 0

PV = 48288.83

PMT = -1000

I/Y = 0.45

CPT N

N = 54.57 Answer

jeff jeffy answered 2 years ago

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