Megan wanted to borrow $50 000 and was offered a reducing balance loan over 20 years at 6.9% p.a. (adjusted monthly) with monthly instalments. a What will be the monthly repayment value?
It says the answer is 384.65 and I get a different answer depending on what calculator I use
Megan wanted to borrow $50 000 and was offered a reducing balance loan over 20 years at 6.9% p.a. (adjusted monthly) with monthly instalments. a What will be the monthly repayment value?
It says the answer is 384.65 and I get a different answer depending on what calculator I use
That is CORRECT!. The monthly payment on a loan of $50,000 repaid over 20 years, or over 240 months @ 6.9% compounded monthly is $384.65. The formula you use to calculate this is:
PMT=PV. R.{[1 + R]^N/ [1 + R]^N - 1}=PMT NEEDED TO PAY OFF A LOAN OF $1,
Where R=Interest rate per period, N=number of periods, PMT=periodic payment. PV=Present value.
