Question

Thomas is taking out a business loan of $20,000 over 5 years. He is given an APR of 6.12% he would like his monthly payments to not exceed $350 a month. Looking at the first few rows of the amortization table below, will his monthly payment be below $350 ? How much over/ under will hi actual payments be from his goal of $350? How much over/ under will his actual payments be from his goal of $350 per month?

Answer 1

1. Thomas' monthly payment for the loan exceeds $350.

2. An excess monthly payment of $37.77 exists.

3. Thus, the actual monthly payment is $387.77.

What is interest?

The interest is the finance charge for the loan, representing the cost of the time value of money.

The interest and the monthly payments can be calculated using an online finance calculator as follows:

Data and Calculations:

Business Loan = $20,000

Down Payment = 0%

Loan Term = 5 years or 60 months (5 x 12)

Interest Rate = 6.12%

 

Monthly Mortgage Payment = $387.77

Total of 60 Mortgage Payments = $23,266.38 ($387.77 x 60)

Total Interest = $3,266.38

Thus, Thomas' actual monthly payment is $387.77.

Learn more about calculating interests at brainly.com/question/25545513

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