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You want to buy a car, and a local bank will lend you $10,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 7% with interest paid monthly. What will be the monthly loan payment

Respuesta :

thaovtp1407

Answer:

PMT = $603.44

Explanation:

Given that:

  • Your loan:  $10,000 (P)
  • n = 5 years = 5*12 = 60 months
  • Interest rate: 7% /12= 0.7/12

As we know, the formula to find payment per period is:

PMT = [tex]P(i(1+i)^n)/((1+i)^n-1)[/tex]

<=> PMT = [tex]10000(0.7/12(1+0.7/12)^60)/((1+0.7/12)^60-1)[/tex]

<=> PMT = $603.44

Hope it will find you well.

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