Given:
Loan Amount: $290,000
Loan Terms: 30 years = 360 months = n (convert years to months)
Interest Rate: 5% =
Monthly Loan Payment Formula:
Monthly Loan Payment =
Substitute given values into Monthly Payment Formula:
Monthly Loan Payment =
Monthly Loan Payment = $1,556.78 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $1,556.78 * 360 = $560,440.80
Interest Cost = Total Cost – Loan Amount
Interest Cost = $560,440.80 – $290,000 = $270,440.80
Loan Amount: $290,000
Loan Terms: 30 years = 360 months = n (convert years to months)
Interest Rate: 5% =
5/100
= 0.05 = 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 =
290,000 *
0.05
/
12
/
1 – ( 1+ 0.05/12
) -360
Monthly Loan Payment = $1,556.78 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $1,556.78 * 360 = $560,440.80
Interest Cost = Total Cost – Loan Amount
Interest Cost = $560,440.80 – $290,000 = $270,440.80
