U.S. and Global Economics: Involving MATH

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.

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asked by Mary
  1. 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. thx so much!!!!!

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    posted by Mary
  3. You're welcome.

  4. 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

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    posted by Reiny
  5. ok, thx

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    posted by Mary
  6. kuch vi nai yar

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  7. わかりません

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