LOAN AMORTIZATION You want to buy a car, and a local bank will lend you $30,000....

LOAN AMORTIZATION You want to buy a car, and a local bank will lend you $30,000. The loan will be fully amortized over 7 years (84 months), and the nominal interest rate will be 6% with interest paid monthly. What will be the monthly loan payment? Round to TWO decimal places.

Solutions

Expert Solution

Information provided:

Present value (PV)= $30,000

Time (N)= 7 years*12 = 84 months

Monthly interest rate (I/Y)= 6%/12 = 0.50%

Enter the below in a financial calculator to compute the monthly loan payment:

PV= -30,000

N= 84

I/Y= 0.50

Press the CPT key and PMT to compute the monthly loan payment.

The value obtained is 438.26.

Therefore, the monthly loan payment is $438.26.

In case of any query, kindly comment on the solution.

jeff jeffy answered 1 year ago

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