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.