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What is the monthly payment needed to repay a $50000 loan in ten years, if the bank charges 0.8 percent per month

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Final answer:

To calculate the monthly payment for a loan, we can use the formula: Monthly Payment = P * r * (1 + r)^n / ((1 + r)^n - 1). Substituting the values into the formula will give us the monthly payment needed to repay the loan.

Step-by-step explanation:

To calculate the monthly payment for a loan, we can use the formula:

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

Where:

  • P is the principal amount of the loan ($50,000)
  • r is the monthly interest rate (0.008)
  • n is the total number of payments (10 years * 12 months/year = 120)

Substituting the values into the formula, we get:

Monthly Payment = $50,000 * 0.008 * (1 + 0.008)^120 / ((1 + 0.008)^120 - 1)

Solving this equation will give us the monthly payment needed to repay the loan.

User Juanpavergara
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