Answer:
Monthly payment is $840.12
Explanation:
we are given: $70000 which is the present value of the loan Pv
12% compounded monthly where the interest rate is adjusted to monthly where i = 12%/12
the period in which the loan will be repaid in 15years which contain 15x12 = 180 monthly payments which is n
we want to solve for C the monthly loan repayments on the formula for present value as we are looking for future periodic payments.
Pv = C[((1- (1+i)^-n)/i] thereafter we substitute the above mentioned values and soolve for C.
$70000= C[((1-(1+(12%/12))^-180))/(12%/12)] then compute the part that multiplies C in brackets and divide by it both sides.
$70000/83.32166399 = C then you get the monthly loan repayments
C = $840.12 which is the monthly repayments of the $70000 loan.
