Question

An employee obtained a loan of P100,000 at the rate of 6% compounded in order to build a house. How much must he pay monthly to amortize the loan within a period of 10 years?

Answer 1

$R = P × r / [1 - (1 + r)^{-n}]$

$P=100000$

$r=0.06/12=0.005$

$n=12\cdot 10=120$

$R=100000\cdot 0.005/(1-(1+0.005)^{-120})=P\ 1111.11$