What is the required monthly payment to repay a loan of 3200

\"What is the required monthly payment to repay a loan of $32,000 in 9 years if the interest rate is 7.79% coumpounded daily? (Assume 30 days per month.)\"

Solution

There is a equal monthly payment made to repay a loan amounting to $32,000 within 9 years which implies there will be 9*12 = 108 monthly payments. The interest rate is 7.79% coumpounded daily. Find the effective interest rate per month as (1 + 7.79%/365)^30 - 1 = 0.64226%.

Find the monthly payment A = 32000(A/P, 0.64226%, 108)

= 32000*0.012867

= $411.75

This is the required monthly payment.