Loan Payment Formula - Principal
Where rate = Annual Percentage Rate divided by 1200
For example, an 8 % annual rate becomes .0066666666666666...
Here, the loan formula has been solved for principal.|
The local bank can arrange for us to have a 10 year loan at 6 per cent interest and we know we can afford to pay $1,300.00 per month for the loan.
How much money will we be able to borrow?
1) The rate would be 6 ÷ 1,200 = .005
2) The months would be 12 × 10 = 120.
3) We can pay $1,300.00 month.
4) So the principal would be:
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