Problema Solution
find the payment necessary to amortize a 6% loan of $1500 compounded quarterly, with 7 quarterly payments. Calculate the total payments and the total amount of interest paid?
Answer provided by our tutors
PMT=(L*i*(1+i)^n)/(1+i)^n-1
PMT=(1500*(.06/4)*(1+.12/4)^7)/[(1+.12/4)^7-1]
PMT=(1500*.03*(1.03)^7)/[(1.03)^7-1]
PMT 45*1.2299/.2299
PMT=55.35/.2299=240.74
This is the monthly payments, which happens 7 times. Therefore the total payment is 1685.16
1685.16 is %112.34 of the original $1500 loan.