Problem: Find the monthly payment on a 100,000$, 25-year mortgage at 12% interest compounded monthly.
I do these on my calculator (T-83 plus)
What I have so far:
FV- 100,000
PMT- (to be solved)
PV- 0
N and i I cannot find…. How do I find N and i?
I do not understand what interest compounded monthly means. Someone please tell me. Thanks
rhsaunders
March 8, 2010 at 12:29 pm
n, the number of payments will be 25 x 12. I, the interest compounded per payment, will be 0.12/12 = 0.01. Your calculator may have built-in thingies to perform the multiplication and division by 12; check the manual. The first month’s interest will be $1,000 even; the payment amount will be about $1050.54.