To determine To calculate: The payment required to amortize the loan. Explanation Given: The amount of loan is $95,000. The interest rate is 3.67%. The tenure of the annuity is 30 years. Formula used: R = P i 1 − ( 1 + i ) − n Calculation: Step 1: Rate is expressed as a decimal. Thus, to convert the rate percent into a decimal, rate percent is divided by 100. i = 3.67 % = 3.67 100 = 0.0367 Step 2: It is assumed that the interest is compounded monthly. Therefore, the interest rate is divided by 12. i = 0.0367 12 = 0.00305833 Step 3: It is assumed that interest is compounded monthly. Therefore, the number of years is multiplied by 12. n = 30 × 12 = 360 To compute the monthly payment ( R ) required to amortize the loan, the following formula is used

Mathematics with Applications, Books a la Carte, and MyLab Math with Pearson eText - Title-Specific Access Card Package (12th Edition)

12th Edition

ISBN: 9780134862651

Author: Lial

Publisher: PEARSON

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Chapter 5, Problem 55RE

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To calculate: The payment required to amortize the loan.

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Chapter 5, Problem 54RE

Chapter 5, Problem 56RE

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