Given:
Loan Amount: $50,000
Loan Terms: 72 months = n
Interest Rate: 4% =
Monthly Loan Payment Formula:
Monthly Loan Payment =
Substitute given values into Monthly Payment Formula:
Monthly Loan Payment =
Monthly Loan Payment = $782.26 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $782.26 * 72 = $56,322.72
Interest Cost = Total Cost – Loan Amount
Interest Cost = $56,322.72 – $50,000 = $6,322.72
Loan Amount: $50,000
Loan Terms: 72 months = n
Interest Rate: 4% =
4/100
= 0.04 = 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 =
50,000 *
0.04
/
12
/
1 – ( 1+ 0.04/12
) -72
Monthly Loan Payment = $782.26 ( rounded to two decimal places)
Notes:
Total Cost = Monthly Loan Payment * Number of Payments
Total Cost = $782.26 * 72 = $56,322.72
Interest Cost = Total Cost – Loan Amount
Interest Cost = $56,322.72 – $50,000 = $6,322.72
