What is the approximate monthly payment (at the end of the period) required for a $500,000...

Question

Question

What is the approximate monthly payment (at the end of the period) required for a $500,000 loan at 4% APR over 15 years?

business accounting

Answer 1

Answer #1

Solution:

Monthly interest rate = 4%/12 = 0.333333%

Loan amount = $500,000

Nos of monthly payments = 15*12 = 180

Monthly payment amount = $500,000 / Cumulative PV factor at 0.333333% for 180 periods

= $500,000 / 135.19215

= $3,698

Hence option a is correct.

Answer 2

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