Question

Consider a student loan of 25000 at a fixed APR of 6% for 15 years calculate the monthly payment

Answer 1

Answer:

Monthly payments of student loan 25000 at fixed APR of 6% for 15 years is 264 units of money approximately

Solution:

Given that  

Amount of student loan P = 25000

APR = R = 6%

Duration = T = 15 years  

First let’s calculate interest on loan.

Interest = $\frac{P \times R \times T}{100}$ = $\frac{25000 \times 6 \times 15}{100}$ = 22500

Total amount needs to pay back = Loan amount + interest = 25000 + 22500 = 47500

Duration in which amount needs to be pay back = 15 years = 15 $\times$ 12 = 180 months

Monthly payment = Total amount needs to pay back / duration in months  

= $\frac{47500}{180}$

= 263.88.

Hence monthly payments of student loan 25000 at fixed APR of 6% for 15 years is 263.888 approx 264 units of money.