Question

Trey is taking a loan for $85,000.It is a 20-year loan with an APR of 5.85%. What will his monthly payment be?

Answer 1

85,000÷((1−(1+0.0585÷12)^(−12×20))÷(0.0585÷12))=601.63

Answer 2

The Monthly payment is 601.6337

Explanation:

Loan Amount is $85,000

Time period is 20 years

APR is 5.85%

Payment is supposed to made monthly so
`n=12*20=240`

As we know that

`p=(r(PV))/(1-(1+r)^(-n)) \\\\where, r=(0.0585)/(12)=0.004875 , n=240,PV=85000\\\text{Substitute the values and simplify}\\\\`

`p=(0.004875*85000)/(1-(1+0.004875)^(-240)) =601.6337\\\\`