Monthly loan payment on a $22,000 loan for 5 years with a 7% interest rate

Given:
Loan Amount: $22,000
Loan Terms: 5 years = 60 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
 ) -60

Monthly Loan Payment =  $435.63  ( rounded to two decimal places)
Notes:
Total Cost =  Monthly Loan Payment * Number of Payments
Total Cost =  $435.63 * 60 =  $26,137.80
Interest Cost =  Total Cost – Loan Amount
Interest Cost =  $26,137.80 – $22,000 =  $4,137.80

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

Monthly Loan Payment

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