Monthly loan payment on a $22,000 loan for 3 years with a 7% interest rate

Given:
Loan Amount: $22,000
Loan Terms: 3 years = 36 months = n  (convert years to months)
Interest Rate: 7% =
7/100
= 0.07 = 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 =  
22,000  * 
0.07 / 12
/ 1 – ( 1+
0.07/12
 ) -36

Monthly Loan Payment =  $679.30  ( rounded to two decimal places)
Notes:
Total Cost =  Monthly Loan Payment * Number of Payments
Total Cost =  $679.30 * 36 =  $24,454.80
Interest Cost =  Total Cost – Loan Amount
Interest Cost =  $24,454.80 – $22,000 =  $2,454.80

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

Monthly Loan Payment

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