Monthly loan payment on a $5,900 loan for 2 years with a 5.4% interest rate

Given:
Loan Amount: $5,900
Loan Terms: 2 years = 24 months = n  (convert years to months)
Interest Rate: 5.4% =
5.4/100
= 0.054 = 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 =  
5,900  * 
0.054 / 12
/ 1 – ( 1+
0.054/12
 ) -24

Monthly Loan Payment =  $259.90  ( rounded to two decimal places)
Notes:
Total Cost =  Monthly Loan Payment * Number of Payments
Total Cost =  $259.90 * 24 =  $6,237.60
Interest Cost =  Total Cost – Loan Amount
Interest Cost =  $6,237.60 – $5,900 =  $337.60

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

Monthly Loan Payment

Related Glossary Terms

Related Applications

Related Solutions