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Math Help - Amortization Formula :( Pleez?

  1. #1
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    Red face Amortization Formula :( Pleez?

    Thank you fo helping me, if you can lol :

    Use the Amortization Formula to compute
    a monthly car payment if L = $26,000 financed
    over 60 months at 4.9% interest rate.

    Payment = Loan (x 1 - 1
    (1-(1+x)^N)

    Payment = L(x(1-1(1-(1+x)^N)))
    Code for Symbols
    r≡annual interest in decimal format
    y≡number of payments to be made per year (integer)
    N≡total number of payments to be made (integer)
    L≡amount of Loan
    x≡ry
    ()≡(parentheses)
    ^≡exponent caret
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  2. #2
    A riddle wrapped in an enigma
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    Quote Originally Posted by Steph07 View Post
    Thank you fo helping me, if you can lol :

    Use the Amortization Formula to compute
    a monthly car payment if L = $26,000 financed
    over 60 months at 4.9% interest rate.

    Payment = Loan (x 1 - 1
    (1-(1+x)^N)

    Payment = L(x(1-1(1-(1+x)^N)))
    Code for Symbols
    r≡annual interest in decimal format
    y≡number of payments to be made per year (integer)
    N≡total number of payments to be made (integer)
    L≡amount of Loan
    x≡ry
    ()≡(parentheses)
    ^≡exponent caret
    I can't really tell what your formula says.
    I used the following amortization formula found Here.

    A=P\frac{r(1+r)^n}{(1+r)^n-1}, where

    where

    • A = payment Amount per period (monthly periods)
    • P = initial Principal (loan amount)
    • r = interest rate per period (yearly rate / 12)
    • n = total number of payments or periods
    A = payment per month
    P = 26,000
    r = 4.9% per year / 12 months = \frac{.049}{12}%
    n = 60 monthly periods

    A=26000\frac{\frac{.049}{12}\left(1+\frac{.049}{12  }\right)^{60}}{\left(1+\frac{.049}{12}\right)^{60}-1}

    A=\$489.46
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