Compounded monthly means each month the interest rate is one twelfth the yearly rate. And since you're compounding each month for twenty years, you compound it 12*20 times. Solve for A to find monthly installment.
Hey everyone,
I hope this is in the right section. Anyway, the problem I have is "a $200,000 loan is to be repaid over 20 years in equal monthly installments, beginning at the end of the first month. Find the monthly payment if the loan is at an annual rate of 9%, compounded monthly." Any help?
Thanks,
Peter
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http://www.weallstartsomewhere.com/finmaths.php