Asked by Donovan

Jasmine is taking out a small business loan for her floral shop. She plans to apply for a $30,000 loan with a 5-year term and a 3.75% interest rate. She is unsure of her expected monthly profits, so she wants to know the benefit of a smaller loan. Using the loan amortization formula, how much money would Jasmine save over the life of the loan if she were to borrow $10,000 less?

Enter your answer as a dollar amount

How do I plug it in the Formula ?????
Answered by oobleck
what is your formula?
Answered by Donovan
Monthly pay = int. rate / 12 months * cost of car after downpayment / (1-(1+ int. rate/12 months)^( - term length of loan )
Answered by Donovan
the cpst of car payment is from another problem ignore that
Answered by oobleck
Monthly pay = int. rate / 12 months * cost of car after downpayment / (1-(1+ int. rate/12 months)^( - term length of loan )

what don't you get? Just plug in your numbers:
M = 0.0375/12 * 30000/(1-(1+.0375/12)^60)
since 5 years is 60 months
Answered by Reiny
i = .0375/12 = .003125
n = 5(12) = 60
payment = p
PV = 30000

p(1 - 1.003125^-60)/.003125 = 30000
p(54.6331109) = 30000
p = 549.12

now repeat the above calculation with a PV of 20,000
(hint, I bet you it will be 2/3 of our first payment)

so what is necessary to do with those answers?
Answered by pee
answer plz
Answered by Jiskha
Jesus christ they think we have time to do all this math, just give us the freaking answer so I can move on with my day.
Answered by caleh
$549.12
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