Find the periodic payment R required to amortize a loan of P dollars over t years with interest earned at the rate of r%/year compounded m times a year. Round your answer to the nearest cent.
P = 60,000, r = 10.5, t = 29, m = 10

A) R = $538.48
B) R = $304.53
C) R = $662.01
D) R = $604.66

Question

Find the periodic payment R required to amortize a loan of P dollars over t years with interest earned at the rate of r%/year compounded m times a year. Round your answer to the nearest cent. ​
P = 60,000, r = 10.5, t = 29, m = 10
​
A) R = $538.48
B) R = $304.53
C) R = $662.01
D) R = $604.66

Quizplus · Accepted Answer

We can use the formula:
R = P * (r/m) * (1 + r/m)^(mt) / [(1 + r/m)^(mt) - 1]

Plugging in the values, we get:
R = 60000 * (10.5/100/10) * (1 + 10.5/100/10)^(10*29) / [(1 + 10.5/100/10)^(10*29) - 1]
R = $662.01

Therefore, the closest option is C, with R = $662.01.

Find the Periodic Payment R Required to Amortize a Loan