You borrow $260,000.00 that charges you 6.1% interest, compounded monthly. You will make payments monthly in the amount of $1,900.00. How many payments will it take for you to payoff the loan? It will take monthly payments. (Round to 2 decimal places.)
You borrow $260,000.00 that charges you 6.1% interest, compounded monthly. You will make payments monthly in the amount of $1,900.00. How many payments will it take for you to payoff the loan? It will take monthly payments. (Round to 2 decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![You borrow $260,000.00 that charges you 6.1% interest, compounded monthly. You will make payments monthly in the amount of $1,900.00. How many payments will it take for you to payoff the loan?
It will take [ ] monthly payments. (Round to 2 decimal places.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F78782b0c-b9fc-454e-a1b9-541fb0be2ec0%2F9dd49a4b-95a0-4c87-b4c8-9c2817e8a498%2Fzhy4ifk_processed.png&w=3840&q=75)
Transcribed Image Text:You borrow $260,000.00 that charges you 6.1% interest, compounded monthly. You will make payments monthly in the amount of $1,900.00. How many payments will it take for you to payoff the loan?
It will take [ ] monthly payments. (Round to 2 decimal places.)
Expert Solution
Step 1
Monthly Payment (PMT)
= P * r * [ (1 +r)n /({1 + r}n -1)]
Where P = Principal amount borrowed =260,000
r = periodic interest rate = 6.1/12 months
= 0.5083333333% per month
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