Question

A small restaurant was purchased for 316000 with no down payment and a 6.6% loan for 10 year. Find the monthly payment

Answer 1

We will have the following:

First, we calculate the total payment per year:

$p_y=316000\cdot0.066\Rightarrow p_y=20856$

Now, we calculate the monthly payment:

$316000=\frac{p}{0.0055}(1-\frac{1}{(1+0.066)^{120}})\Rightarrow1738=p(0.9995331951\ldots)$$\Rightarrow p=\frac{1738}{(1-\frac{1}{(1+0.066)^{120}})}\Rightarrow p=1738.811686$

So, the monthly payment will be approximately $1738.811686.