Posted by **Gibbons** on Tuesday, June 22, 2010 at 2:33am.

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 -
**MathMate**, Tuesday, June 22, 2010 at 8:57am
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

## Related Questions

- Mathematics - A loan of $7,000,000 is being amortised over 48 months at an ...
- Finance - Loans problem please help - A company borrows $170000, which will be ...
- Please Help me with a Finance - Loan problem - A company borrows $170000, which ...
- math - The Sandersons are planning to refinance their home. The outstanding ...
- math - The Sandersons are planning to refinance their home. The outstanding ...
- Finite Math - The Sandersons are planning to refinance their home. The ...
- Finance - Loans problem - Reiny the answer 307.33 you posted at the bottom is ...
- Finance - A bank is willing to give you a Rs1,000,000 home mortgage at 12% ...
- calculus - the monthly payment that amortizes a loan of A dollars in t yr when ...
- MATH - Consider an amortized loan of $10,000 ( with 10.0% interest compounded ...

More Related Questions