Question

If I borrow $80,000 in loans for college and have to pay back the loan every...

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!

Homework Answers

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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