Posted by Gibbons on .
A loan of $7,000,000 is being amortised over 48 months at an interest rate of 12% compounded monthly. Find:
(a) the monthly payment;
(b) the principal outstanding at the beginning of the 36th month;
(c) the interest in the 36th payment;
(d) the principal in the 36th payment and
(e) the total interest paid.
You can tackle most monthly monthly payment questions with the following formula.
n=number of compounding periods
P=payment at each period
R=interest rate per period, in the form of 1.08 for 8%
For the given case,
(a)Solve for P to get $184336.84 for the monthly payment
(b) The amount outstanding is the amount of the last payment less one month interest, $184336.84/1.01=$182511.72
(c) = difference between (a) and (b)
(d) = (b)
(e) = 48*(a)-7000000