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Math Help - Monthly payment amount

  1. #1
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    Monthly payment amount

    Amount of purchases=15,000. Down payment= 2,000. Rate of interest=8%. Term of loan=5 yrs. Monthly payment amount (P and I)=? Find the Monthly payment amount. the answer i got is 322.80.

    I did the problem by A = 13000(1 + .08/12)^(12*5) = $19,367.99
    Monthly payment = $322.80.

    My friend said i did the problem wrong and she got $263.64 and wont explain how. I am so lost.

    my other problem is like this

    2.) Amount of purch.= 128,000. DP= 30,000. Rate of interest=5%. Term of loan is 30 years. What is the monthly payment amount (P. & I.)?

    My answer came out to be A = 98000(1 + .05/12)^(12*30) = $437,838.94
    Monthly payment = $1,216.22. wrong again?
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  2. #2
    Super Member

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    From
    Lexington, MA (USA)
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    Hello, sissylove!

    Amount of purchases: $15,000. .Down payment: $2,000
    Rate of interest: 8%. .Term of loan: 5 yrs.

    Find the Monthly payment.


    I did the problem by: .A .= .13000(1 + .08/12)^(12*5) .= .$19,367.99
    Monthly payment: .$19,367.99 60 .= .$322.80

    My friend said i did the problem wrong and she got $263.64 . She's right
    . . and wont explain how. . She's mean!

    What you found is the total amount we'd owe if we made no payments.
    They would charge us interest on the entire $13,000 for the entire five years.
    Then we would pay them $19,367.99 at the very end.


    The problem is an "Amortization", like car loans and home mortgages.
    And this requires a special formula . . . and you're expected to know it.

    . . . . . . . . . i(1 + i)^n
    . . A .= .P----------------
    . . . . . . . .(1 + i)^n - 1

    where P is the amount of the loan, i is the periodic interest rate
    . . and n is the number of periods.


    We have: .P = 13000, . i = 0.08/12, .n = 60

    . . . . . . . . . . . . . . . (0.08/12)(1 + 0.08/12)^60
    Then: . A .= .13,000--------------------------------- . = . 263.5931259
    . . . . . . . . . . . . . . . . . (1 + 0.08/12)^60 - 1


    Therefore, the monthly payment is $263.59

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  3. #3
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    Mar 2007
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    I am having trouble putting the steps into action and down on paper. I'm still not sure how to do it. 13000(1 + .08/12)^(12*5) is making me confused. the ^ is really throwing me off. do i take the answr from the 1 + .08 / 12 and add it to the 12*5?? I am very sorry. I thought i understood this but i dont.
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  4. #4
    Junior Member
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    Jun 2007
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    Egypt/Cairo
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    MY answer for this q:
    P=276.1
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