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 ?????
8 answers
what is your formula?
Monthly pay = int. rate / 12 months * cost of car after downpayment / (1-(1+ int. rate/12 months)^( - term length of loan )
the cpst of car payment is from another problem ignore that
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
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
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?
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?
answer plz
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.
$549.12