Given:
Loan Amount: $30,000
Loan Terms: 5 years = 60 months = n (convert years to months)
Interest Rate: 3% =
Monthly Loan Payment Formula:
Monthly Loan Payment =
Substitute given values into Monthly Payment Formula:
Monthly Loan Payment =
Monthly Loan Payment = $539.06 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $539.06 * 60 = $32,343.60
Interest Cost = Total Cost – Loan Amount
Interest Cost = $32,343.60 – $30,000 = $2,343.60
Loan Amount: $30,000
Loan Terms: 5 years = 60 months = n (convert years to months)
Interest Rate: 3% =
3/100
= 0.03 = 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 =
30,000 *
0.03
/
12
/
1 – ( 1+ 0.03/12
) -60
Monthly Loan Payment = $539.06 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $539.06 * 60 = $32,343.60
Interest Cost = Total Cost – Loan Amount
Interest Cost = $32,343.60 – $30,000 = $2,343.60
