Given:
Loan Amount: $45,000
Loan Terms: 72 months = n
Interest Rate: 5% =
Monthly Loan Payment Formula:
Monthly Loan Payment =
Substitute given values into Monthly Payment Formula:
Monthly Loan Payment =
Monthly Loan Payment = $724.72 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $724.72 * 72 = $52,179.84
Interest Cost = Total Cost – Loan Amount
Interest Cost = $52,179.84 – $45,000 = $7,179.84
Loan Amount: $45,000
Loan Terms: 72 months = n
Interest Rate: 5% =
5/100
= 0.05 = 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 =
45,000 *
0.05
/
12
/
1 – ( 1+ 0.05/12
) -72
Monthly Loan Payment = $724.72 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $724.72 * 72 = $52,179.84
Interest Cost = Total Cost – Loan Amount
Interest Cost = $52,179.84 – $45,000 = $7,179.84
