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vodomira [7]
3 years ago
14

You take out $50,000 for loans during your college career. You must pay it back with 7% APR for 20 years, making monthly payment

s. Calculate the minimum monthly payment needed to do this.
Mathematics
1 answer:
Ad libitum [116K]3 years ago
3 0

Answer:

The monthly payment for the loan amount for 20 years is $806.167

Step-by-step explanation:

The principal loan amount= $ 50,000

The rate of interest = 7 %

the time period of loan = 20 years = 20 × 12 = 240 months

let the amount after 20 years = $ A

<u>From Compounded method</u>

Amount = Principal × (1+\dfrac{\textrm rate}{100})^{\textrm Time}

or, A = 50,000 × (1+\dfrac{\textrm 7}{100})^{\textrm 20}

or, A = 50,000 × (1.07)^{20}

Or, A = 50,000 × 3.8696

∴ Amount = $ 193,480

So, The amount after 20 years = $ 193,480

The monthly payment amount = $ \frac{193480}{240} = $ 806.167

Hence The monthly payment for the loan amount for 20 years is $806.167 Answer

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