Given:
Loan Amount: $1,800
Loan Terms: 36 months = n
Interest Rate: 12% =
Monthly Loan Payment Formula:
Monthly Loan Payment =
Substitute given values into Monthly Payment Formula:
Monthly Loan Payment =
Monthly Loan Payment = $59.79 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $59.79 * 36 = $2,152.44
Interest Cost = Total Cost – Loan Amount
Interest Cost = $2,152.44 – $1,800 = $352.44
Loan Amount: $1,800
Loan Terms: 36 months = n
Interest Rate: 12% =
12/100
= 0.12 = 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 =
1,800 *
0.12
/
12
/
1 – ( 1+ 0.12/12
) -36
Monthly Loan Payment = $59.79 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $59.79 * 36 = $2,152.44
Interest Cost = Total Cost – Loan Amount
Interest Cost = $2,152.44 – $1,800 = $352.44
