Post a New Question

Mathematics

posted by 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.

  • Mathematics - ,

    You can tackle most monthly monthly payment questions with the following formula.

    AR^n=P(R^n-1)/(R-1)
    where
    n=number of compounding periods
    A=Amount borrowed
    P=payment at each period
    R=interest rate per period, in the form of 1.08 for 8%
    For the given case,
    A=7000000
    R=1.01
    n=48
    (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

Answer This Question

First Name:
School Subject:
Answer:

Related Questions

More Related Questions

Post a New Question