Monthly Payments
A local coffee shop is looking to expand its physical location footprint, and is shopping around for loans. What would be the estimated 5 year monthly payment on a $200,000 loan, with a 10% annual interest rate?
Expand Hint
$$$Monthly\:Payment=\frac{[rate*loan\:amount]}{[1-(1+rate)^{-(number\:of\:payments)}]}$$$
$$$Monthly\:Payment=\frac{[rate*loan\:amount]}{[1-(1+rate)^{-(number\:of\:payments)}]}$$$
$$$=\frac{[(.1/12)*200,000]}{[1-(1+(0.1/12))^{-(12months*5yr)}]}$$$
$$$=\frac{0.00833*200,000}{0.392211}$$$
=
$4,250/month
$4,250/month
Time Analysis
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