i = .16/12 = .013333...
p(1 - (1.013333..)^-12)/.01333.. = 250000
solve for p , where p is the monthly installment
Barclays bank has agreed to give Dumisani a loan of $250 000 on the following conditions:
a) 16% interest rate compounded monthly
b) Dumisani will have to pay back 12 equal installments each at the end of each quarter.
Determine the value of each installment
3 answers
Your annual interest rate (usually called an APR or annual percentage rate) is listed in the loan documents. To get the monthly interest rate that you need, simply divide the annual interest rate by 12.
So,16% annual interest rate would be divided by 12 to get a monthly interest rate of 1.34%. This would then be expressed as a decimal for the equation by dividing it by 100 as follows: 1.34/100=0.0134. So 0.0134 will be the monthly interest rate used in these calculations.
So,16% annual interest rate would be divided by 12 to get a monthly interest rate of 1.34%. This would then be expressed as a decimal for the equation by dividing it by 100 as follows: 1.34/100=0.0134. So 0.0134 will be the monthly interest rate used in these calculations.
How do you calculate the interest on the amortization schedule
1 answer