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Using monthly payment formula, the principal of the facility paying a monthly payment of $8750 for 25 years at a rate of 5.50% is $1,424,878.39
Monthly Payment
The monthly payment is the amount paid per month to pay off the loan in the time period of the loan. When a loan is taken out it isn't only the principal amount, or the original amount loaned out, that needs to be repaid, but also the interest that accumulates.
The formula to calculate the monthly payment of a facility is;
A = P[(r(1 + r)ⁿ] / [(1 + r)ⁿ - 1]
- Monthly payment (MP) = 8750
- time (t) = 25 years
- Rate (r) = 5.50%
- Principal (P) = ?
- Number of payment (n) = number of months in a year * time of facility
Substituting the values into the formula and solving for p
P = $1,424,878.39
Learn more on monthly payment here;
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