Thabo pays off the loan by making monthly payments for 5 years. To calculate the monthly payment amount, we can use the formula for calculating a loan payment:
PMT = P [r(1 + r)^n] / [(1 + r)^n - 1]
Where:
P = loan amount (R80000)
r = monthly interest rate (annual interest rate / 12 months)
n = total number of payments (5 years * 12 months per year)
Assuming an annual interest rate of 10%, we can calculate the monthly interest rate as follows:
r = 0.10 / 12 = 0.008333
n = 5 * 12 = 60
Plugging these values into the formula, we get:
PMT = 80000 [0.008333(1 + 0.008333)^60] / [(1 + 0.008333)^60 - 1]
PMT = 80000 [0.008333(1.008333)^60] / [(1.008333)^60 - 1]
PMT = 80000 [0.008333(1.6258)] / [1.6258 - 1]
PMT = 80000 [0.013548] / 0.6258
PMT = 1083.84
Therefore, Thabo will need to make monthly payments of approximately R1083.84 to pay off the loan of R80000 over a period of 5 years.
Thabo pays off loan of R80000over a period of 5 years
1 answer
1 answer