Question

A total of $50,000 is borrowed and repaid with 60 monthly payments, with the first payment occurring 1 month after receipt of the $50,000. The stated interest rate is 6 percent compounded quarterly. What monthly payment is required? Check your answer using Excel and resolve the problem in Excel if the payments are 25 quarterly payments.

Answer 1

The question involves calculating the monthly payment for a $50,000 loan with a 6% interest rate compounded quarterly and repaid in 60 monthly installments, or alternatively, with 25 quarterly payments using Excel's PMT function.

Step-by-step explanation:

The question is about calculating the monthly payment for a loan of $50,000 with a 6 percent interest rate compounded quarterly and repaid with 60 monthly payments.

To solve this using Excel, the PMT function can be used, which includes the rate, number of periods, and present value of the loan.

For payments made quarterly instead of monthly, the number of payments and the rate must be adjusted accordingly in the Excel PMT function.

The question involves calculating the monthly payment for a $50,000 loan with a 6% interest rate compounded quarterly and repaid in 60 monthly installments, or alternatively, with 25 quarterly payments using Excel's PMT function.