Question

If I borrow $80,000 in loans for college and have to pay back the loan every month for 15 years after graduation. If the rate is 8%, what is the amount of my monthly loan payment?

Please explain to me how I would enter this information on Excel and how I can solve it. Thank you!

Answer #1

Amount of
monthly loan payment |
= | Loan amount/Present value of annuity of 1 | ||||||||||

= | $ 80,000 | / | 104.6381 | |||||||||

= | $
764.54 |
|||||||||||

Working: | ||||||||||||

Present value of annuity of 1 | = | (1-(1+i)^-n)/i | Where, | |||||||||

= | (1-(1+0.006667)^-180)/0.006667 | i | 8%/12 | = | 0.006667 | |||||||

= | 104.6381 | n | 15*12 | = | 180 | |||||||

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