Question 1201600: At graduation, you have a student loan of $19,000. The loan has a fixed annual interest rate of 3.4%, compounded monthly, for 10 years. What will your monthly payments be? (Enter numeric answers to 2 decimal places.)
Found 2 solutions by ikleyn, math_tutor2020:
Answer by ikleyn(52781)   (Show Source):
You can put this solution on YOUR website! .
At graduation, you have a student loan of $19,000.
The loan has a fixed annual interest rate of 3.4%, compounded monthly, for 10 years.
What will your monthly payments be? (Enter numeric answers to 2 decimal places.)
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In parallel, learn the relevant formulas and calculation technique from the accompanying text.
Answer by math_tutor2020(3817)  (Show Source):
You can put this solution on YOUR website!
Answer: $186.99
Work Shown:
The formula to use is
P = (L*i)/( 1-(1+i)^(-n) )
where,
P = monthly payment
L = loan amount
i = monthly interest rate in decimal form
n = number of months
In this case
L = 19000
i = 0.034/12 = 0.0028333 approximately
n = 10*12 = 120 months
Then,
P = (L*i)/( 1-(1+i)^(-n) )
P = (19000*0.0028333)/( 1-(1+0.0028333)^(-120) )
P = 186.994047599858
P = 186.99
The answer can be confirmed with a calculator such as this one
https://www.calculator.net/loan-calculator.html
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