Question

A man borrowed P200,000 from a bank at 12% compounded monthly, which is payable monthly for 10 years (120 payments). If the first payment is to be made after 3 months, how much is the monthly payment?

Answer 1

The monthly payment is given as:

$Pmt=\frac{PV}{[\frac{1-\frac{1}{(1+\frac{r}{m})^{nm}}}{\frac{r}{m}}]}$

Where PV is P200000

r is 12%

n is 10

m is 12

$\therefore Pmt=\frac{200000}{[\frac{1-\frac{1}{(1+\frac{12\%}{12})^{10×12}}}{\frac{12\%}{12}}]}$

$Pmt=P286.94$