Solve.
-Calculate the monthly payment for a student loan of $135,240 at a fixed APR of 5.7% for 20 years.

Question

Quizplus · Accepted Answer

The monthly payment for a fixed-rate loan can be calculated using the formula for an annuity: $P = \frac{rPV}{1 - (1 + r)^{-n}}$, where P is the monthly payment, PV is the present value of the loan (i.e., the loan amount), r is the monthly interest rate (annual rate divided by 12), and n is the total number of payments (months). For this loan, PV = $135,240, the annual interest rate is 5.7% (so the monthly interest rate r = 5.7% / 12 = 0.00475), and the loan term is 20 years or 240 months. Plugging these values into the formula gives the monthly payment, which calculates to approximately $945.64.

Solve. -Calculate the Monthly Payment for a Student Loan of $135,240