Question

what is the monthly payment for a loan if the amount to finance is $12,385 the APR is 6.9% for 5 years and the monthly payment per $100 is $1.98

Answer 1

The EMI formula is:

`(P*R*(1+R)^(N) )/((1+R)^(N)-1 )` ; where

P = 12385

R = 0.00575 (monthly) (6.9/12/100)

N = 60 (12*5)

Putting these values in formula we get:

`(12385*0.00575(1.00575)^(60) )/(1.00575^(60)-1 )`

`(100.4541)/(0.4106)` = 244.652

Hence, the monthly installment becomes $ 245 approx.

Answer 2

$1.98 * ($12,385/$100) = $245.22