Question 958620
It cannot be 0.25% per year.. If the 0.25% is correct, then it is the MONTHLY rate, which adds up to 3% per year. Could it be 2.5% per year?
Here is an example you can follow once you clarify the interest rate issue, I will use 2.5%/year (0.025):
-------------------
Step 1 - Monthly Rate (precisely, banker-style)
Monthly rate = {{{(1+annual rate)^(1/12)(-1)}}}
Monthly rate= {{{(1+0.025)^(1/12)(-1)}}}
Monthly rate= ~0.0020598
NOTE: One of the most common mistakes is to simply divide annual rate by 12 to get monthly rate. However, you are not a banker. If you don't need to be THAT precise, then just take .025/12= 0.0021.
--------------------
Step 2 - Find monthly payment:
A = monthly payment amount
P = loan amount (25,000)
i = monthly interest rate (the one we figured out above, 0.0020598)
n = total number of payments (10 years x 12 months= 120 payments)
{{{A=P*i/1-(1+i)^n}}}
{{{A= 25000*0.0020598/1-(1.0020598)^-120}}}
{{{A= 235.35}}}