Monthly loan payment on a $10,000 loan for 5 years with a 4% interest rate

Given:
Loan Amount: $10,000
Loan Terms: 5 years = 60 months = n  (convert years to months)
Interest Rate: 4% =
4/100
= 0.04 = 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 =  
10,000  * 
0.04 / 12
/ 1 – ( 1+
0.04/12
 ) -60

Monthly Loan Payment =  $184.17  ( rounded to two decimal places)
Notes:
Total Cost =  Monthly Loan Payment * Number of Payments
Total Cost =  $184.17 * 60 =  $11,050.20
Interest Cost =  Total Cost – Loan Amount
Interest Cost =  $11,050.20 – $10,000 =  $1,050.20

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