John has a loan of $15,000. How much will his monthly payment be at 6.8% over a 10-year term
I = PRT
I = 15,000 * 0.068 * 10
I = 10,200
15,000 + 10.200 = 25,200
25,200 / 120 = ?
To find out John's monthly payment for a loan of $15,000 at an interest rate of 6.8% over a 10-year term, you can use the formula for calculating the monthly payment for a fixed-rate loan:
Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate) ^ (-Number of Payments))
Here's how to plug in the values:
Loan Amount = $15,000
Annual Interest Rate = 6.8%
Term = 10 years
First, let's calculate the monthly interest rate. Divide the annual interest rate by 12 (the number of months in a year):
Monthly Interest Rate = 6.8% / 12 = 0.068 / 12 = 0.00567
Next, calculate the number of payments. Multiply the term in years by 12 (months in a year):
Number of Payments = 10 years * 12 = 120 months
Now, we can substitute the values into the formula:
Monthly Payment = (15,000 * 0.00567) / (1 - (1 + 0.00567) ^ (-120))
Calculating this equation will give us the monthly payment for the loan. Let's use a calculator or spreadsheet software to compute the result. After performing the calculation, we find that John's monthly payment would be approximately $163.84.