Shonda buys an Amalgamated dining room furniture set for $10,000, makes a down payment of 20%, and finances the rest with 60-month store financing at an annual interest rate of 5.4% compounded monthly. What is the amount of her monthly loan payment to amortize the loan?

Answer 1

P2 = P1*r*t/(1-(1+r)^-t).

P1 = $10.000 * 0.80 = $8,000 = Loan amount.
r = 0.054/12 = 0.0045/mo.
t = 60 mo.
P2 = 8000*0.0045*60/(1-1.0045^(-60)) = $9,146.42

Monthly Payment = P2/t.