Answer: $387.23
Explanation:
Given that,
Borrowed from bank, P = $50,000
Annual interest rate, r = 8% = 0.08
Monthly rate of interest = [tex]\frac{0.08}{12}[/tex]
= 0.0067
Tenure(period), n = 25 years = 25 × 12
= 300 months
[tex]Monthly\ Installments=\frac{P\times r\times (1+r)^{n}}{[(1+r)^{n}-1]}[/tex]
[tex]Monthly\ Installments=\frac{50,000\times 0.0067\times (1+0.0067)^{300}}{[(1+0.0067)^{300}-1]}[/tex]
[tex]=\frac{50,000\times0.0067\times7.413453}{7.413453-1}[/tex]
[tex]= \frac{2,483.50676}{6.413453}[/tex]
= 387.23
Therefore, the required monthly payment is $387.23