SOLUTION: what is the monthly payment on a 25 year loan of 85,500 if the annual interest rate is 10% a. $807.97 b.$777.20 c.$746.42 d.$854.15

Question 1120507: what is the monthly payment on a 25 year loan of 85,500 if the annual interest rate is 10%
a. $807.97
b.$777.20
c.$746.42
d.$854.15
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
use the following online financial calculator.

https://arachnoid.com/finance/

inputs are:

present value = 25000
future value = 0
number of time periods = 25 years * 12 months per year = 300 months.
interest rate per time period = 10% per year / 12 = .8333333.....% per month.
the calculator rounds to 6 decimal digits.
just make sure you enter at least 7 to allow it to do so.
payment is made at the end of each time period.

click on PMT and the calculator tells you that the payment at the end of each monthly time period is equal to 776.94.
it is shown as negative since this is money going out, while the present value is money coming in.
if you had shown the present value as negative, then the payment would have shown as positive.

here's a display of the results of using this calculator.

$$$

i confirmed with the TI-BA-II financial calculator that this is accurate.

financial formulas that can be used manually can be found in the following reference.

https://www.algebra.com/algebra/homework/Finance/THEO-2016-04-29.lesson#notes

your selections do not show 776.94 as the payment.

the closest one is 777.2.

since that's the closest, i would choose selection b.

i used three different calculators plus the manual formula and they all showed 776.94, so i don't know where the 777.2 comes from.

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