# Thread: Monthly payment amount

1. ## 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? 2. 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

3. 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.

4. MY answer for this q:
P=276.1

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