Financial Literacy

Question

A loan of $1000 at an annual rate of 5.5% compounded monthly is being paid in installments of $52.44 every month.

How many payments will be required to pay the loan completely?

Answer 1

PV = PMT(1 - (1 + r/n)^{- N}/(0.055/n); Here PV = 1000; PMT = 52.44, n = 12, N is total number of payments

1000 = 52.44(1 - (1 + 0.055/12)^-N)/(0.055/12); N = 20