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Determining a Monthly Loan Payment

Item 3-bed room house
Price K120,000.00
Down Payment K30,000.00
Amount of Loan
Interest Rate 9%
Period (Years) 5
Monthly Payment
Total Interest
Total Cost

User Ejdyksen
by
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1 Answer

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To determine the monthly loan payment, total interest, and total cost for a 3-bedroom house priced at K120,000.00 with a down payment of K30,000.00, an interest rate of 9%, and a loan period of 5 years, you can use the formula for calculating the monthly payment of a fixed-rate mortgage:

Monthly Payment = P[r(1+r)^n] / [(1+r)^n-1]

Where:
P = Principal amount (Loan amount - Down Payment)
r = Monthly interest rate (Annual interest rate / 12 / 100)
n = Total number of payments (Loan period in years * 12)

Let's calculate:

P = K120,000.00 - K30,000.00 = K90,000.00
r = 9% / 12 / 100 = 0.0075
n = 5 * 12 = 60

Monthly Payment = K90,000.00[0.0075(1+0.0075)^60] / [(1+0.0075)^60-1]

Now, calculate the Monthly Payment.

Total Interest = (Monthly Payment * n) - P
Total Cost = Total Interest + P

Please calculate these values using the provided formulas.
User Rml
by
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