Figure out the average monthly payments for two purchases made with loans using the amortization calculation formula.
Alternatives: Do your own amortization calculations using spreadsheet software* or generate an amortization payment chart by using an online financial calculator.
Amortization Calculation Formula
A = payment amount
P (aka pv) = principal (the present value of the loan)
R = interest rate, per period (decimal number)
N = total number of payments over which the loan will be repaid
|Description||Present Value of Loan (pv)||Annual Interest Rate (APR)||Interest Rate Per Period (r)||Number of Payments (n)||Payment Amount|
|Total Amount to be Repaid|
|$100||40.0%||40% / 12 = $3.33%||6||$18.66||$18.66 x 6 = $111.96|
|Big-Screen TV||$700||7.0%||7% / 12 = .58%||24|
|College Loan||$12,000||3.5%||3.5% / 12 = .29%||180|
*See Microsoft Excel File, “Amortization Calculation”
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Using the chart above, calculate the Total Payment Amount for a Big-Screen TV.CorrectIncorrect
Using the chart above, calculate the Total Amount to be Repaid on a Big-Screen TV.CorrectIncorrect
Using the chart above, calculate the monthly Payment Amount on a College Loan.CorrectIncorrect
Using the chart above, calculate the Total Amount to be Repaid on a College Loan.CorrectIncorrect