Given:
Loan Amount: $25,300
Loan Terms: 5 years = 60 months = n (convert years to months)
Interest Rate: 7.44% =
Monthly Loan Payment Formula:
Monthly Loan Payment =
Substitute given values into Monthly Payment Formula:
Monthly Loan Payment =
Monthly Loan Payment = $506.24 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $506.24 * 60 = $30,374.40
Interest Cost = Total Cost – Loan Amount
Interest Cost = $30,374.40 – $25,300 = $5,074.40
Loan Amount: $25,300
Loan Terms: 5 years = 60 months = n (convert years to months)
Interest Rate: 7.44% =
7.44/100
= 0.0744 = 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 =
25,300 *
0.0744
/
12
/
1 – ( 1+ 0.0744/12
) -60
Monthly Loan Payment = $506.24 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $506.24 * 60 = $30,374.40
Interest Cost = Total Cost – Loan Amount
Interest Cost = $30,374.40 – $25,300 = $5,074.40
