Answer by D Stanley for How to calculate monthly payment of a loan
The difference is how you interpret "8% compounded annually" In reality, loan rates are quoted as "annual", meaning the actual monthly interest rate is n/12 (r/n in your formula). Most loan payment...
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How to calculate monthly payment of a loan
I am trying to solve this question:Your brother-in-law asks you to lend him $100,000 as a second mortgage on his vacationhome. He promises to make level monthly payments for 10 years, 120 payments in...
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Answer by Chris Degnen for How to calculate monthly payment of a loan
As D Stanley comments, the problem is with the rate."8% compounded annually" is a 'nominal' rate, as identified by the statement of a compounding period.A 'nominal rate compounded annually' is exactly...
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