Solve the problem using the loan payoff table or an amortization table.
-If you borrowed $5,738,447.10 at 9% interest paid monthly for 3 years, what is the amount of each payment?

Question

Solve the problem using the loan payoff table or an amortization table. 
-If you borrowed $5,738,447.10 at 9% interest paid monthly for 3 years, what is the amount of each payment?

Quizplus · Accepted Answer

Using an amortization table, we can calculate the monthly payment to be $182,482.62. This is the amount needed to pay off the loan in 36 months (3 years) with a 9% interest rate. Therefore, the best choice is B. Using an amortization table, we can find the monthly payment. The formula to calculate the monthly payment for a loan is:

P = (Pv * r) / (1 - (1 + r)^-n)

where:
Pv = present value of the loan ($5,738,447.10)
r = monthly interest rate (9%/12 = 0.0075)
n = total number of payments (3 years * 12 months/year = 36)

P = ($5,738,447.10 * 0.0075) / (1 - (1 + 0.0075)^-36) = $182,482.62

So, the amount of each payment would be $182,482.62. Therefore, the best choice is B.

Solve the Problem Using the Loan Payoff Table or an Amortization