This can be done with formulas or with a TVM calculator. Business calculators have this feature, as does the TI-83/84 family of calculators. In the video, I explain how to do it with formulas. Here I'll show how to do it with a TVM solver. On a TI-83/84, it is the Finance App, and within that, it is the TVM Solver. You would enter the following values:
N=72
I%=2.85/12
PV=12500
PMT and FV should both be 0. Note that, in the I% field, I used the percentage form of the interest rate (2.85%), not the decimal form (0.0285).
We're trying to solve for the payment, so we move the cursor to the PMT field and push ALPHA ENTER (SOLVE). The number -189.0832828 will appear in that field. Note that this is a negative number. Don't worry; that's not a mistake. The negative indicates that the cash is flowing in the opposite direction. When you took out the loan, $12,500 came to you in the form of a loan, and then you are paying $189.08 back to the creditor in the opposite direction.
We would then do the same as I show in the video and multiply this figure by 72, to get $13,614. You can actually just arrow up to that field, then to the end of that long decimal, and enter *72, and then ENTER, and you will see the answer in that field.
