Question

How long will it take to pay off a loan of ​$50,000 at an annual rate of 9 percent compounded monthly if you make monthly payments of ​$500​?

Use five decimal places for the monthly percentage rate in your calculations.

The number of years it takes to pay off the loan is __ years.  ​(Round to one decimal​ place.)

Answer 1

185.531532 months

15.5 years

Step-by-step explanation:

We use the NPER formula in this question that is shown in the spreadsheet.

The NPER represents the time period.

Given that,

Present value = $50,000

Future value = $0

Rate of interest = 9% ÷ 12 months = 0.75%

PMT = $500

The formula is given below:

= NPER(Rate;PMT;-PV;FV;type)

The present value come in negative

So, after solving this, the answer in months would be 185.531532 month

And, in year it would be 15.5 years after dividing by 12 months, the number of year comes