You borrow $2000 from the Credit Union. The interest rate is 12% annually (nominal). You pay back the bank in 24 equal installments starting one month from the date you borrow the money. a. What is your monthly payment? Solution: Since the loan is paid monthly, the interest rate is 0.12/12 = 0.01 per month. a. The monthly payment is: A = 2000(A/P, 0.01, 24) = 211.16. Does A/P mean annuity payment? How do you solve for this? Thank you
Provided you pay the credit back monthly in 24 equal installments, then I got 94,15 as the result. Either your solution or the data seem not to be correct. How to get solution: You compute it with the help of TVM worksheet of your financial calculator.
mihau10 is correct. the payment is 94.15. in your notation, A/P is most likely “Annual Payment”. here though you’ve divided everything down to monthly figures so although it’s labeled A/P it’s really M/P. using the BAII+ you would punch in: 24 [N] 1 [I/Y] 2000 [PV] [CPT] [PMT]
OK this is good. I get 94.15 also. The solution the book gave is wrong. thank you
Yes, I also got 94.15. Just don’t forget to punch in [FV]=0 or do a memory clearing before the calculation.