Given:
Loan Amount: $25,300
Loan Terms: 60 months = n
Interest Rate: 7.2% =
Monthly Loan Payment Formula:
Monthly Loan Payment =
Substitute given values into Monthly Payment Formula:
Monthly Loan Payment =
Monthly Loan Payment = $503.36 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $503.36 * 60 = $30,201.60
Interest Cost = Total Cost – Loan Amount
Interest Cost = $30,201.60 – $25,300 = $4,901.60
Loan Amount: $25,300
Loan Terms: 60 months = n
Interest Rate: 7.2% =
7.2/100
= 0.072 = 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 *
0.072
/
12
/
1 – ( 1+ 0.072/12
) -60
Monthly Loan Payment = $503.36 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $503.36 * 60 = $30,201.60
Interest Cost = Total Cost – Loan Amount
Interest Cost = $30,201.60 – $25,300 = $4,901.60
