Determine the amount of the monthly payment that will amorti

Determine the amount of the monthly payment that will amortize following Loan mount = $130,000; annual interest rate = 6.75%; time term is 20years

Solution

P = loan amount = 190000

r = 6.75% = 0.0675

t = 20 yr

find monthly payment (n = 12)

A = P*i*(1 + i/n)^nt/[(1 + i/n)^nt - 1]

A = 190000*(0.0675/12)*(1 + 0.0675/12)^240/[(1 + 0.0675/12)^240 - 1]

A = 1444.69