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Getting a Loan with Interest Compounding Monthly
[Deactivated] on 29/06/2017 - 13:36
Last edited 30/06/2017 - 21:10 by 1 other user
Last edited 30/06/2017 - 21:10 by 1 other user
Comments
Just compound it 240 times at the monthly rate.
Of course you have issues calculating, you didnt even tell us the loan amount!!!
If you have a financial calculator, like a Texas BA2 or just use an online financial calculator.
PV= -Loan Amount
I = 9.1/12
N (total months) = 240
FV = 0
Calc PMTCompounding simply means interest on interest.
Google compounding interest formula. Use the one that says A = P(1+r/n)to the power of nt. Follow instructions. This is the correct formula, however I can't explain how to use it in a post - what might also help is a working example. Google should be able to provide.
excel has the formulas to calculate the interest and principal payments
You use the PV annuity formula and you solve for "P", the repayment per period. You will need to divide 9.1% by 12 for the monthly rate "r" and the "n" will be 20 years * 12 months. Obviously the PV is whatever the loan you get is.
http://financeformulas.net/formulaimages/PV%20of%20Annuity%2…
Your answer should be $7339.96 per month.
If you use the compound formula you don't take into account the amortization of the loan which is why your number would be massive (and wrong).
Isn't this the stuff you learn in a bachelors degree?
This is a question in my MBA study, finance assignment!
doing post grad study and asking what compound is. I did this for business maths in year 10.
OP will struggle through MBA. Loan calc is like basic ABC for finance and he calls it "difficult situation". He hasn't even had a sniff of the real stuff yet like equity value calc, derivatives, the stats stuff, option pricing, etc. OP be prepared to cry at some point.
810,000=PV of all payments, use the formulas
interest per month is 9.1%/12
no. of payments is 20 * 12
So, 810,000*(9.1%/12)/(1-(1+9.1%/12)^-240)=7339.9555 or $7339.96 per month.Is this what passes for a MBA level graduate research skill in Australia now? Asking ozbargain?! (looks everywhere for laughter emoji!)
What was the undergrad study in?
Where was OzBargain when I was at Uni?
The hours / days / weeks / months I wasted on text books, sample papers, statistical formula handbooks and even Alta Vista….could have been saved on this forum.
FML.
Just put on the assignment that you didn't go through with the loan so don't need to know the repayments
This is a 2unit math question I had over 10 years ago. I expect there to be n * (n+1) * (n+2) formula somewhere in there.
Maybe if we see what you have worked out we can help?