Answer
The monthly payments for this loan is equal to $3,234.94
Work Step by Step
1. Write the formula for loan payment:
$PMT = PV\frac{i}{1 - (1 +i)^{-n}}$
2. Identify the values:
$PV = 250,000$
- Monthly payment: m = 12
- 9.5% : r= 0.095
- 10 years : t = 10
i$=r/m=\frac{0.095}{12}$
$n=mt=12 \times 10 = 120$
3. Substitute the values and calcule the payment:
$PMT = (250,000)\frac{\frac{0.095}{12}}{1 - (1 + \frac{0.095}{12})^{-120}} = 3,234.94$
