If we borrow $150,000 for 30 years at 8 per cent annual percentage rate. What is the monthly payment?

1) The rate would be 8 divided by 1,200
which equals .0066666666…
2) The months would be 12 × 30 = 360.
3) So the monthly Payment would be:

          .0066666666          
.0066666666 + ((1.0066666666 ^360)-1) × $150,000

4) The middle section of the equation is the most difficult to solve so we will calculate that first.

(.0066666666) ÷ ((1.0066666666 ^360)-1) =

(.0066666666) ÷ (10.935729397036 -1) =

(.0066666666) ÷ 9.935729397036 =

0.0006709790897

5) “Plugging” this into the rest of the equation we have:

(.0066666666 + 0.0006709790897) × $150,000 =

(0.007337645756) × $150,000 =

$ 1,100.65

Aren’t you glad you have the Loan Calculator to use instead of this method?