A person borrowed $30000 to finance the purchase of a new vehicle. The loan will be...
A person borrowed $30000 to finance the purchase of a new vehicle. The loan will be paid off in 5 years, and the borrowing interest rate is 6%. The person is required to make monthly payments to the loan. What is the amount of monthly payment?
N (number of loan payments) =
I (monthly interest rate) = %
PV (amount borrowed) =
FV (ending loan balance) =
PMT (required monthly payment) =
Homework Answers
Information provided:
Purchase price= present value= $30,000
Time= 5 years*12= 60 months
Interest rate= 6%/12= 0.50% per month
The monthly payment is calculated by entering the below in a financial calculator:
PV= -30,000
N= 60
I/Y= 0.50
Press the CPT key and PMT to compute the monthly payment.
The value obtained is 579.9805.
Therefore, the amount of monthly payment is $579.98.
In case of any query, kindly comment on the solution.
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