Question

Marshall has a $20,000, 4 year Loan loan with an APR of 5,4% what is his monthly payment?

Answer 1

Marshall's monthly payment = $464.22

Explanation:

Principal = $2000

time = 4 years

In months = 4 × 12 = 48 months

Annual percentage rate (APR) = 5.4%

Using the monthly payment formula for APR:

$\text{Monthly payment =\lbrack rate + }\frac{rate}{\lbrack(1+rate)^{months}\rbrack-1}\rbrack\times principal$

rate in the formula is calculated by dividing the APR by 1200

rate = 5.4/1200 = 0.0045

$\text{Monthly payment = \lbrack}0.0045\text{ +}\frac{0.0045}{\lbrack(1+0.0045)^{48}\rbrack-1}\rbrack\times20000$$\begin{gathered} \text{Monthly payment = \lbrack}0.0045\text{ +}\frac{0.0045}{\lbrack(1.0045)^{48}\rbrack-1}\rbrack\times20000 \\ \text{= \lbrack}0.0045\text{ +}\frac{0.0045}{\lbrack1.2405011524\rbrack-1}\rbrack\times20000 \\ =\lbrack0.0045\text{ +}\frac{0.0045}{0.2405011524}\rbrack\times20000 \end{gathered}$$\begin{gathered} =(0.0045\text{ +0.0187109291)}\times20000 \\ =(0.0232109291)\times20,000\text{ = 464.218582} \\ \text{Monthly payment = \ 464.22} \end{gathered}$

Marshall's monthly payment = $464.22