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How long will you be paying back a $20000 loan at 10% fixed rate interest compounded monthly if you pay $500 per month?

April 26, 2017compounded fixed loan pay paying rate

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How long will you be paying back a $20000 loan at 10% fixed rate interest compounded monthly if you pay $500 per month?

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To perform this calculation, leave Payment Periods empty, set Interest Rate to 10, Present Value to 20000, Periodic Payment is -500, and set Future Value is 0 (you do not want to owe anything at the end of the loan). Compounding is Monthly, Payments are Monthly, assume End of Period Payments, and Discrete Compounding. Now, click on the Calculate button next to the Payment Periods area, you should calculate 48. Answer: You will pay off the loan in 4 years (48 months).