Math for Professionals
posted by Sherry .
You find that a small business loan in the amount of 50,000 is the amount you need to purchase the restaurant location. After researching banks to find the best interest rate, you find that banks for small businesses offer the best interest rate of 9% interest that compounds monthly for 7 years.
What formula do I use to solve this problem.
What does "solving the problem" entail ?
Are you finding the monthly payment to pay back the loan ?
If so, then ...
payment [1 - (1+i)^-n]/i = present value
in your case,
i = .09/12 = .0075, n = 84 and PV = 50000
payment [ 1 - 1.0075^-84}/.0075 = 50000
payment = 804.45