Given:
Loan Amount: $50,000
Loan Terms: 72 months = n
Interest Rate: 8% =
Monthly Loan Payment Formula:
Monthly Loan Payment =
Substitute given values into Monthly Payment Formula:
Monthly Loan Payment =
Monthly Loan Payment = $876.66 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $876.66 * 72 = $63,119.52
Interest Cost = Total Cost – Loan Amount
Interest Cost = $63,119.52 – $50,000 = $13,119.52
Loan Amount: $50,000
Loan Terms: 72 months = n
Interest Rate: 8% =
8/100
= 0.08 = 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 =
50,000 *
0.08
/
12
/
1 – ( 1+ 0.08/12
) -72
Monthly Loan Payment = $876.66 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $876.66 * 72 = $63,119.52
Interest Cost = Total Cost – Loan Amount
Interest Cost = $63,119.52 – $50,000 = $13,119.52
