if you have a loan amount for $100,000 and interest rate is 8.750% and term is 360 what is the monthly
payment?
The appropriate formula is: M = P [ i (1 + i)n ] / [ (1 + i)n - 1 ]
where: M = monthly payment
P = principal ( 100, 000 )
i = monthly interest rate ( 0.0875 / 12 ) [ Since 8.75 is a yearly rate, divide by 12 ]
n = number of monthly payments ( 360 )
M = 100000 [ 0.0875/12 (1 + 0.0875/12) ^ 360 ] / [ (1 + 0.0875/12) ^ 360 - 1 ]
M = $786.70