Another loan question
How would you solve this type of question?
Suppose you recieve a loan from the government to go to school. You recieve 750 dollars a month for the 30 months you are a student. The monthly interest rate is 0.2 %. You can't pay off the loan until the end of the 30th month.
A. What's the balance you owe at the end of the 30 months?
B. Right after these 30 months are over, if the student pays off the loan over the next 10 years making a payment monthly, what is the value of this monthly payment?
Thanks again. It's for a business class. >.<
It would help if you could show the method step by step so if I get something like this on my test I can do it.
"Step by step"? Sorry, this is not a classroom.
Originally Posted by RU091
Step 1: calculate future value of the $750 payments to the borrower;
use "future value of annuity formula"; let results = F
Step 2: calculate loan payment to pay off $F; use loan payment formula.
If you're taking a business class, above 2 formulas should be supplied by teacher;
if not, look 'em up; I suggest google.