Calculate the equal monthly payment of interest and principal for a $750,000 loan fully amortized over...

Question

Question

Calculate the equal monthly payment of interest and principal for a $750,000 loan fully amortized over 12 years at an annual rate of interest of 5.75%.

business finance

Answer 1

Answer #1

Loan amount = Present value of future monthly payments = monthly payment * [1-(1+i)^-n]/i

i = interest rate per period

n = number of periods

=>

Monthly payment * [1-(1+0.0575/12)^-144]/(0.0575/12) = 750000

=>

monthly payment = 7222.21

Answer 2

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