Question

1) You receive a $20,000, 8% (APR) 5-year amortized loan. How much would be your payment if:

-Make payments at the end of the year.

-Make payments at the end of the quarter.

-Make payments at the end of the month.

-How much you end up paying back to the bank over the 5 years under each payment period?

Answer 1

The formula for finding payment per period,

p = payment per period

P = Loan

n = number of payment per year

t= year

r = annual interest rate,

R = r/n , N = n*t

Payment Method	R	N	p	Total Interest	Total Payment
Yearly	8%	5	5009.13	5045.65	25045.65
Quarterly	2%	20	1223.13	4462.69	24462.69
Monthly	0.67%	60	405.53	4331.67	24331.67