Question 1187635: Suppose the monthly amortization for a loan of a certain company is 1,000,000.00 Php with an interest rate of 15% a year. What is the monthly amortization for a period of 7 years and what is the interest earned for seven years?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! if the loan is for 1,000,000, and the loan term is 7 years and the payment are made at the end of each month, then:
pv = 1,000,000
fv = 0
np = 7 years * 12 months per year = 84 months.
ir = 15% per year divided by 12 months per year = 1.25% per month.
payment at end of each month.
using the https://arachnoid.com/finance/index.html calculator, the results indicate that the payment required at the end of each month is equal to 19,296.75.
inputs are everything but pmt.
output is pmt.
pv is positive because it's money coming in.
pmt is negative because it's money going out.
here is a display of the results.
'
the total payments = 84 * that = 1,620,927.
the total interest paid = 1,620,927 minus 1,000,000 = 620,927.
if they are looking for a more exact answer, then try:
pmt = 19,296.75474.
interest = 620,927.3978.
that answer was obtained through the use of the ti-ba-ii business analyst calculator.
the online calculator rounds the answer to the nearest penny, which is ok for most problem solutions.
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