Question

The monthly payment of the installment loan. I understand how to put it in the installment loan formula, I’m not understanding how to calculate it. Please can someone break it down for me

Answer 1

Explanation:

See equation in image below

PV = present value 16000

i = decimal interest per period = .05 / 12

n = periods = 3 yrs * 12 mo/yr = 36 periods

C = ?

16000 = C * [ 1 - (1+i)^-n ] / i

16000 = C * [1 - ( 1 + .05/12)^-36 } / ( .05/12) < solve for C

C =$ 479.53