# U.S. and Global Economics: Involving MATH

posted by Mary

PLZZZ.. Help I just don't understand how to calculate this

A landlord wants to acquire an additional apartment building for \$250,000. The new building contains eight apartment units, which will each rent for \$500 per month. The bank is willing to loan the landlord the money for a long-term, 30-year loan at a 5.5 percent interest rate. Calculate the monthly payment, and explain whether taking this loan for the new building is a smart business decision.

1. Ms. Sue

I= PRT
250,000 * 0.05 * 30

I = 375,000

250,000 + 375,000 = 625,000

625,000 / 360 = 1,736.11 monthly payment

Compare the monthly payment with the amount of rent he expects to receive each month.

2. Mary

thx so much!!!!!

3. Ms. Sue

You're welcome.

4. Reiny

Ms Sue used the concept of simple interest.
This is a longterm annuity type question and has to be done with compound interest.
i = .055/12 = .0045833.... , n = 12(30) = 360

let the monthly payment be P
250000 = P( 1 - 1.00458333...^-360)/.00458333..
P = 1419.47

5. Mary

ok, thx

kuch vi nai yar

7. Chui lee

わかりません

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