*Principal loan is Php218,009.78 payable in 24 equal monthly installments of Php12,353.89. Qouted Interest rate per month is 1.5%. I am wondering how they got the factor of 0.5666667. What is the formula to get the factor? It seems the effective interest is so high.*

The actual interest rate is 36%. (1.5*24). Where did you get the 0.5666667 from 24/36 is 0.6666667.

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Posted on Dec 10, 2008

A=P((1-(1+r)^(-n))/r, where A is the present value of the annuity, or the amount of the loan, P is the periodic payment, r is the interest rate per period, and n is the number of periods. In this case, I assume the payments are monthly, so n would be 36. You mentioned that you already have A and P. However, solving for r algebraically is not that easy because it is in two places on the right hand side. However, you can make a table and put in interest rates to make both sides equal. Remember to multiply this answer by 12 to get the annual interest rate.

For example, if the payment is $100, and the amount of the loan is $2,766.07, and the number of periods is 36, what is the interest rate.

r Calculate Actual Difference

0.010 3010.75 2766.07 -244.68

0.011 2959.42 2766.07 -193.35

0.012 2909.33 2766.07 -143.26

0.013 2860.42 2766.07 -94.35

0.014 2812.68 2766.07 -46.61

0.015 2766.07 2766.07 0.00

0.016 2720.55 2766.07 45.52

0.017 2676.11 2766.07 89.96

You can see from the chart that the value of r of 0.015 makes the difference 0, so the periodic interest rate is 0.015 or 1.5%. We need to annualize this by multiplying by 12 and we get an annual interest rate of 18%.

Good luck,

Paul

Annuity Payment PV

For example, if the payment is $100, and the amount of the loan is $2,766.07, and the number of periods is 36, what is the interest rate.

r Calculate Actual Difference

0.010 3010.75 2766.07 -244.68

0.011 2959.42 2766.07 -193.35

0.012 2909.33 2766.07 -143.26

0.013 2860.42 2766.07 -94.35

0.014 2812.68 2766.07 -46.61

0.015 2766.07 2766.07 0.00

0.016 2720.55 2766.07 45.52

0.017 2676.11 2766.07 89.96

You can see from the chart that the value of r of 0.015 makes the difference 0, so the periodic interest rate is 0.015 or 1.5%. We need to annualize this by multiplying by 12 and we get an annual interest rate of 18%.

Good luck,

Paul

Annuity Payment PV

Aug 15, 2016 | Calculators

Press the APPS key, select the Finance app, and then TVM_Solver.

For N, enter 5 * 1 2 for 5 monthly payments.

For I%, enter 1 . 9 / 1 2 for the monthly interest rate.

For PV, enter 1 8 0 0 0 for the present value of the loan.

Make sure "END" is highlighted on the bottom line.

Move the cursor to the "PMT" line and press ALPHA ENTER to compute the monthly payment. You'll get a negative number since this represents something you pay out.

For N, enter 5 * 1 2 for 5 monthly payments.

For I%, enter 1 . 9 / 1 2 for the monthly interest rate.

For PV, enter 1 8 0 0 0 for the present value of the loan.

Make sure "END" is highlighted on the bottom line.

Move the cursor to the "PMT" line and press ALPHA ENTER to compute the monthly payment. You'll get a negative number since this represents something you pay out.

Apr 03, 2011 | Texas Instruments TI-83 Plus Calculator

If $100,000.00 loan: enter 100000. in pv,
if interest rate is 5%,
enter 5 divided by 12 = %i
if 30 year mortgage,
enter 360 N
enter 2nd PMT to get monthly principle and interest.
You may have already solved this problem.

Aug 19, 2010 | Texas Instruments BA Real Estate...

Once you're in the TVM solver:

On the top line (N=) type in 5 * 12 ENTER for five years of month payments.

On the I% lline type in 5.5 / 12 ENTER for the month interest rate.

On the PV line type in 18000 ENTER

Make sure the FV is 0 and END is highlighted on the bottom line.

Move the cursor to the PMT line and press ALPHA [SOLVE] (that's ALPHA ENTER) and see -343.82 for the monthly payment.

On the top line (N=) type in 5 * 12 ENTER for five years of month payments.

On the I% lline type in 5.5 / 12 ENTER for the month interest rate.

On the PV line type in 18000 ENTER

Make sure the FV is 0 and END is highlighted on the bottom line.

Move the cursor to the PMT line and press ALPHA [SOLVE] (that's ALPHA ENTER) and see -343.82 for the monthly payment.

Jan 17, 2010 | Texas Instruments TI-83 Plus Calculator

This is something you should see your financial institution over, but when i work the math your looking at a 60 month loan total principal divided by # of months in the term i get a $972 monthly payment, $58 going to intrest out of each payment.

Apr 29, 2009 | HP 17bII Calculator

No. To the nearest cent, the monthly interest is $162.50. The monthly payments only pay the interest, without reducing the principal.

Apr 15, 2009 | Texas Instruments TI-83 Plus Calculator

set your p/y to 12( compounding periods per year). I think you are calculating for a one year loan?

Nov 18, 2008 | Texas Instruments BA-II Plus Calculator

The present value of any future monthly (?) stream of payments stretching some 24 years into the future takes into account the time value of money and depends on the interest rate assumed to apply for each month throughout those 24 years.

There are formulae to calc this for an equal monthly payment and a constant interest rate, over the term but for a variable interest rate you need a spreadsheet.

In the simple case of zero interest assumed throughout the term, present value = current principal balance, but for any positive interest rate, the total present value of the future payment stream is less than the current principal balance.

There are formulae to calc this for an equal monthly payment and a constant interest rate, over the term but for a variable interest rate you need a spreadsheet.

In the simple case of zero interest assumed throughout the term, present value = current principal balance, but for any positive interest rate, the total present value of the future payment stream is less than the current principal balance.

Oct 06, 2008 | Texas Instruments TI-30XA Calculator

Are you putting 30x12=360 for N? Since you have monthly payments, you have to compute it a little different. Also, you have to find the effective monthly interest rate. 1.0575^(1/12) = .4669839%.

Another way is to enter 30 for N and 5.57 for I/Y, and change P/Y to 12.

Hope this helps!

Another way is to enter 30 for N and 5.57 for I/Y, and change P/Y to 12.

Hope this helps!

Apr 08, 2008 | Texas Instruments BA-II Plus Calculator

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