Answer:
$2,349.22
Explanation:
Loan amortization is method of loan repayment using a series of equal payments which each installment covering part of the principal and interest.
The monthly payment can be determined as follows:
Monthly payment = Loan amount/Annuity factor
Annuity factor =( 1 - (1+r)^(-n))/r
r - 7.7%/12 = 0.6416% per month
n = 36 months
Annuity factor = (1 - (1.00641)^(-36))/0.00641)
=32.0531
Monthly payments =75,300/32.0531
= $2,349.22
Monthly payments= $2,349.22
Answer:
$2,349.22
Explanation:
Firstly, We need to get the annuity payment. We have the PVA, the length of the annuity, and the interest rate. By applying the PVA equation:
PVA = C({1 – [1/(1 + r)t]} / r)
$75,300 = C[1 – {1 / [1 + (0.077/12)]36} / (0.077/12)]
After Solving for the payment, we have:
C= $75,300 / 32.05318
C= $2,349.22
2:
To be able to solve the EAR, we apply the EAR equation which is :
EAR = [1 + (APR / m)]m– 1
EAR = [1 + (0.077 / 12)]12– 1
EAR = 0.0798 or 7.98%
