Monthly loan payment on a $20,000 loan for 4 years with a 4.8% interest rate

Given:
Loan Amount: $20,000
Loan Terms: 4 years = 48 months = n  (convert years to months)
Interest Rate: 4.8% =
4.8/100
= 0.048 = 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  * 
0.048 / 12
/ 1 – ( 1+
0.048/12
 ) -48

Monthly Loan Payment =  $458.78  ( rounded to two decimal places)
Notes:
Total Cost =  Monthly Loan Payment * Number of Payments
Total Cost =  $458.78 * 48 =  $22,021.44
Interest Cost =  Total Cost – Loan Amount
Interest Cost =  $22,021.44 – $20,000 =  $2,021.44

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

Monthly Loan Payment

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