CFA® Level 1 Loan Payment Calculation

Monthly Payment Calculation for $15,000 Loan

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Question

What is your monthly payment, beginning next month, on a $15,000 loan, if you pay it off over 48 months and the interest rate is 2.9% per year, compounded monthly?

Answers

Explanations

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A. B. C. D. E.

C

On the BAII Plus, press 48 N, 2.9 divide 12 = I/Y, 15000 PV, 0 FV, CPT PMT. On the HP12c, press 48 n, 2.9 ENTER 12 divide i, 15000 PV, 0 FV, PMT. Note that the answer will be displayed as a negative number. Make sure the BAII Plus has the value of P/Y set to 1.