Monthly loan payment on a $20,000 loan for 60 months with a 6% interest rate

Given:
Loan Amount: $20,000
Loan Terms: 60 months = n
Interest Rate: 6% =
6/100
= 0.06 = r  (convert percent to a decimal)
Monthly Loan Payment Formula:
Monthly Loan Payment =  
Loan Amount  * 
r / 12
/ 1 – ( 1+
r/12
 ) -n

Substitute given values into Monthly Payment Formula:
Monthly Loan Payment =  
20,000  * 
0.06 / 12
/ 1 – ( 1+
0.06/12
 ) -60

Monthly Loan Payment =  $386.66  ( rounded to two decimal places)
Notes:
Total Cost =  Monthly Loan Payment * Number of Payments
Total Cost =  $386.66 * 60 =  $23,199.60
Interest Cost =  Total Cost – Loan Amount
Interest Cost =  $23,199.60 – $20,000 =  $3,199.60

The solution above and other related solutions were provided by the Monthly Loan Payment Application. 

Monthly Loan Payment

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