Results 1 to 2 of 2

Math Help - debt repayment - formula problem...

  1. #1
    Newbie
    Joined
    Apr 2009
    Posts
    2

    debt repayment - formula problem...

    P = rD(1 + r)^m
    ____________
    (1 + r)^m - 1

    Here is the question coming with that formula. A loan of $150000 (D) is to be paid off over 30 years by means of equal monthly payments (m) at a fixed annual rate of 6% (r).

    a) calculate the monthly payment (P)to the nearest dollar.

    Basicaly, i plug the values into the formula and get a riduclous answer of 9000 as the answer. As a monthly payment thats obviously wrong.

    Any help appreciated.
    Follow Math Help Forum on Facebook and Google+

  2. #2
    Newbie
    Joined
    May 2008
    Posts
    15
    I'm not sure what you did...but make sure you:

    Let m = 360...which is 12 months x 30 years. The loan will be paid off over 360 months (a ridiculous loan).

    Let r = 0.005. The question says 6% fixed annual rate. So thats 0.005 monthly (0.06/12 = 0.005).
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Debt Payment Question
    Posted in the Business Math Forum
    Replies: 6
    Last Post: October 3rd 2009, 01:39 PM
  2. A debt for a motorbike
    Posted in the Business Math Forum
    Replies: 5
    Last Post: September 6th 2009, 07:03 PM
  3. Replies: 4
    Last Post: April 7th 2009, 02:46 PM
  4. [SOLVED] how long will it take to pay off this debt?
    Posted in the Business Math Forum
    Replies: 2
    Last Post: March 8th 2009, 02:38 PM
  5. Debt Optimization problem
    Posted in the Calculus Forum
    Replies: 3
    Last Post: July 30th 2008, 07:29 PM

Search Tags


/mathhelpforum @mathhelpforum