Question

Monthly Payment

A 55-year license to use a parking spot at 67 Higgs in New York City costs $2 million. The license holder must stop using the parking space after. If the interest rate is fixed at 0.4% per month for the next 55 years, what is the fixed monthly payment on an equivalent 55-year mortgage to finance this purchase?

Answer 1

EMI	=	[P * R * (1+R)^N ] / [(1+R)^N -1]
Using the formula:
Principle	P	20,00,000
Rate of interest per period:

Rate of interest per period	R	0.048 /12 =	0.400%
Total number of payments:
Frequency of payment	=	Once in 1 month period
Number of years of loan repayment	=	55
Total number of payments	N	55*12 =	660
Period payment using the formula	=	[ 2000000*0.004*(1+0.004)^660] / [(1+0.004 ^660 -1]
EMI	=	8,618.26

monthly payment= 8618.26