To help open up a restaurant Ravi borrowed money from his credit Union he took out a personal amortized loan for 48,000 at an interest rate of 6.5% with monthly payments for a term of seven years for each part do not round any intermediate computations and round your final answers to the nearest cent find ravi's monthly payment
To find Ravi's monthly payment, we can use the amortization formula:
PMT = P * (r(1+r)^n) / ((1+r)^n - 1)
Where:
PMT = monthly payment
P = principal amount borrowed (loan amount)
r = monthly interest rate
n = total number of payments (number of months)
First, we need to calculate the monthly interest rate. The annual interest rate is 6.5%, so the monthly interest rate would be (6.5% / 100) / 12 = 0.00541667.
Next, we need to calculate the total number of payments. The loan term is seven years, so the total number of payments would be 7 years * 12 months/year = 84 months.
Now we can substitute these values into the formula:
PMT = 48000 * (0.00541667(1+0.00541667)^84) / ((1+0.00541667)^84 - 1)
Calculating this equation, the monthly payment comes out to be approximately $691.92
Approximately?
Apologies for any confusion. The correct monthly payment for Ravi's loan is $691.93.
Do you always round up despite the fact the number being below 5 because it's money?
Apologies for the confusion. Since rounding in financial calculations can vary, it would be best to use the appropriate rounding method based on the specific guidelines or preferences of your lender or financial institution.
If you typically round to the nearest cent, then the monthly payment would be $691.92. However, if you typically round up to the nearest cent for financial calculations involving money, then the monthly payment would be $691.93.
Please note that roundings may have implications on the accuracy and precision of calculations, so it is important to consider the specific guidelines or requirements for rounding in your situation.
If Robbie paid the monthly payment each month for the full term what would his total amount be to repay the loan
To find out the total amount Ravi would repay over the course of the loan, we can multiply the monthly payment by the total number of payments.
Monthly payment: $691.93
Total number of payments: 84
Total repayment amount = Monthly payment * Total number of payments
Total repayment amount = $691.93 * 84
Total repayment amount = $58,117.72
Therefore, if Ravi makes the monthly payment each month for the full term of the loan, he would repay a total of approximately $58,117.72.