Tabular Example

To find the effective monthly interest rate on a loan that will be paid off in 5 months. The loan was for 100 with an interest rate of 2% per month compounded daily. (1) \begin{align} EIR=\left[1+\left(\frac{0.02}{30}\right)\right]^{30}-1 = 0.02019454 \end{align} Now use the EIR to calculate the monthly payment. (2) \begin{eqnarray} \text{Payment Amount} & = & 100 \cdot \left(\frac{0.02019454 \cdot (1+0.02019454)^5}{(1+0.02019454)^5-1}\right)\\ & = & \21.2278 \end{eqnarray}
This table contains the computed values:
 Payment Number Payment Amount Interest Principal Payment Balance Remaining 1 $21.2278$2.01945 $19.20837$80.792 2 $21.2278$1.63155 $19.59627$61.195 3 $21.2278$1.23581 $19.99200$41.203 4 $21.2278$0.83208 $20.39570$20.876 5 $21.2278$0.42020 $20.80762$0.0000
page revision: 6, last edited: 16 Feb 2016 16:19