Question

What would the monthly payment be for a $5,000 loan with a 6.25% interest rate compounded monthly spread over 60 months?

Answer 1

Given:
Principal amount = 5,000
interest rate = 6.25%
number of times the interest is compounded per year; 12 times, monthly
terms = number of years; 5 years, 60 months

A = P (1 + r/n)^nt
A = 5,000 (1 + .0625/12)^12*5
A = 5,000 (1 + 0.005)⁶⁰
A = 5,000 (1.35)
A = 6,750

6,750 / 60 months = 112.50 per month