Final answer:
To determine the monthly payment for a $25,000 student loan at 7% interest over 15 years, you can use the formula for a fixed installment loan, applying the principal amount, the monthly interest rate, and the total number of payments.
Step-by-step explanation:
To calculate your monthly student loan payments, you can use the formula for a fixed installment loan, which is derived from the annuity formula. The monthly payment can be found using the following equation:
M = P [ i(1 + i)^n ] / [ (1 + i)^n - 1 ]
Where:
M = Monthly payment
P = Principal amount (the initial amount of the loan)
i = Monthly interest rate (annual interest rate divided by 12)
n = Total number of payments (number of years multiplied by 12)
Assuming the typo '7ompounded monthly' refers to '7% compounded monthly', the monthly interest rate would be 7 divided by 100, and then divided by 12. To calculate the monthly payment for a $25,000 loan over 15 years at 7% annual interest compounded monthly, plug the values into the formula and solve for M.