Question

A total of $50,000 is borrowed and repaid with 60 monthly payments, with the fi rst payment occurring one month after receipt of the $50,000. The stated interest rate is 6% compounded monthly. What monthly payment should be made

Answer 1

Answer:

the monthly payment is $966.6401

Explanation:

The computation of the monthly payment is shown below:

= $50,000 × (1 ÷ 0.005) × (1-(1 ÷ ((1+0.005)^60)))

= $50,000 × 51.72556

= $966.6401

The rate of interest is

= 6% ÷ 12

= 0.005

Hence, the monthly payment is $966.6401