Question

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Answer 1

The monthly payments is $304.12.

How monthly payments on a loan is computed.

The PMT formula is used in financial calculations to determine the periodic payment for a loan or investment.

Given

Loan amount = $15,000

Time = 5 years

Rate = 8%

Convert 5 years to months

n = 5*12 = 60 months

Rate = 8/100 = 0.08

In 12 months = 0.08/12 = 0.0067

`MP = \frac{ {A * i(1 + i)}^(n) }{ {(1 + i)}^(n) - 1}`

Where

MP is monthly payment

A(amount) = $15,000

i = 0.0067

n = 60

Substitute into the equation

`MP = \frac{ {15000 * 0.0067(1 + 0.0067)}^(60) }{ {(1 + 0.0067)}^(60) - 1}`

`= (15000 * 0.0067 * 1.4892)/(1.4892-1)`

`= (148.776)/(0.4892)`

= $304.12

Therefore, the monthly payments is $304.12