How do I compute the yearly payment for a loan of $500,000 at 12% interest which is amortized over a five year period
How do I compute the yearly payment for a loan of $500,000 at 12% interest which is amortized over a five year period
You can do it with the present value of an ordinary annuity formula
$$\\PV = C*\frac{1-(1.12)^{-5}}{0.12}\\\\
500000 = C*3.604776\\\\
c=500000\div 3.604776\\\\
Yearly\;Payment\;=\;\$138,704.87$$
If it's simple interest the equation is 500,000(.12)=x
If it's compund then the eqquation is a little different. 500,000(.12)^5=x
Just type that into your calculator and you're good to go. I really hope this isn't your homework or something, because that would be totally uncool for you to be cheating like this, taking advantage of the math experts on this website. Just remember, if this is your way of cheating, you can't have electronics on a test and you'll fail.
How do I compute the yearly payment for a loan of $500,000 at 12% interest which is amortized over a five year period
You can do it with the present value of an ordinary annuity formula
$$\\PV = C*\frac{1-(1.12)^{-5}}{0.12}\\\\
500000 = C*3.604776\\\\
c=500000\div 3.604776\\\\
Yearly\;Payment\;=\;\$138,704.87$$