First find the total payments Total paid 200×30=6,000 (this is the future value)
Second use the formula of the future value of annuity ordinary to find the monthly payment. The formula is Fv=pmt [(1+r/k)^(n)-1)÷(r/k)] We need to solve for pmt PMT=Fv÷[(1+r/k)^(n)-1)÷(r/k)] PMT monthly payment? Fv future value 6000 R interest rate 0.09 K compounded monthly 12 N=kt=12×(30months/12months)=30 PMT=6000÷(((1+0.09÷12)^(30) −1)÷(0.09÷12)) =179.09 (this is the monthly payment)
Now use the formula of the present value of annuity ordinary to find the amount of his loan. The formula is Pv=pmt [(1-(1+r/k)^(-n))÷(r/k)] Pv present value or the amount of his loan? PMT monthly payment 179.09 R interest rate 0.09 N 30 K compounded monthly 12 Pv=179.09×((1−(1+0.09÷12)^( −30))÷(0.09÷12)) =4,795.15
