Question

what is the monthly payment for a loan if the amount to finance is $12,385 the APR is 6.9% for 5 years and the monthly payment per $100 is $1.98

Answer 1

The EMI formula is:

$\frac{P*R*(1+R)^{N} }{(1+R)^{N}-1 }$ ; where

P = 12385

R = 0.00575 (monthly) (6.9/12/100)

N = 60 (12*5)

Putting these values in formula we get:

$\frac{12385*0.00575(1.00575)^{60} }{1.00575^{60}-1 }$

$\frac{100.4541}{0.4106}$ = 244.652

Hence, the monthly installment becomes $ 245 approx.

Answer 2

$1.98 * ($12,385/$100) = $245.22