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Homework answers / question archive / You want to borrow 600,000 to boy so mem, and you can only afford $4,000 a month to repay the loan

You want to borrow 600,000 to boy so mem, and you can only afford $4,000 a month to repay the loan

Finance

You want to borrow 600,000 to boy so mem, and you can only afford $4,000 a month to repay the loan. suppose the charges you a fixed interest rate of 4% with monthly compound*, How it take you to pay off the loan? 

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We can calculate the number of payments period by using the following formula in excel:-

=nper(rate,pmt,-pv,fv)

Here,

Nper = Number of payments period (monthly)

Rate = 4%/12 = 0.3333% (monthly)

Pmt = $4,000

PV = $600,000

FV = $0

Substituting the values in formula:

= nper(0.3333%,4000,-600000,0)

= 208.29 months

 

Number of years = Nper / 12

= 208.29 / 12

= 17.36 years

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