Question

"What will be the required monthly payment to repay a loan of $36,000 in 8 years if the interest rate is 11.35% compounded continuously?"

Answer #1

Given interest rate is 11.35% per annum.

Now since it is compounded continuously effective rate of interest would be e raised to the power of 11.35%. e is the Euler’s number or natural logarithmic base.

Now,

e^{0.1135} = 1.12

Now we have to find monthly EMI /payment to be made. It can be found easily in MS-Excel by using PMT formula.

PMT formula asks for rate, nper (total number of payments for loan), and PV (present value or principal amount) as mandatory fields.

Here rate will be 1.12% , nper will be 8*12 = 96 and PV will be 36000.

**Putting these values in the formula we get monthly
payment as $613.96**

Use technology to determine the monthly payment amount required
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What payment is required at the end of each month for 2 years to
repay a loan of $4000.00 at 16.4% compounded monthly?

You want to borrow $44,536. You must repay the loan in 6 years
in equal monthly payments and a single $3,319 payment at the end of
6 years. Interest rate is 3% nominal per year.
What will be the loan balance immediately after the
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You want to borrow $22,425. You must repay the loan in 12 years
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What is the effective monthly interest rate for a loan with a 8%
nominal annual interest rate if the loan is compounded
(a) monthly, (b) daily, or
(c) continuously?
A friend offers you a loan at an effective daily interest rate
of 0.2%. (a) What is the nominal (also known as
the APR or Annual Percentage Rate) rate for this loan?
(b) What is the effective annual interest rate for
his loan?
Show all work please

Loan payment Determine the equal, end-of-year payment required
each year over the life of the loans shown in the following table
to repay them fully during the stated term of the loan.
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Term of loan (years)
A $12,000 8%
3
B 60,000 12
10
C 75,000 10
30
D 4,000 15
5

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Compounded annually
Compounded monthly
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Exactly 8 years ago, Sam bought a house which required him to
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he made his 96th payment of required amount plus $250) payoff on
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