If a bank lends $5 million at an interest rate of 10% over an 8 year term what would be the equated monthly installments.
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The loan amount is $5 million and the tenure of payment is 8 years. The annual rate of interest is 10%. Let the amount that has to be repaid every month be E.
The formula for the equated monthly installment is E = P×r×(1 + r)n/((1 + r)n - 1)
Here P = 5000000
r = .05/6
n = 96
E = 5000000*(.05/6)*(1+.05/6)^96/((1 + .05/6)^96 - 1)
The equated monthly installment is $75871
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