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Hey! this is driving me crazy and I know its easy. Lets say I take out a 30 year 40,000 mortgage with interest of 11%. How do I calculate the interest and figure out the monthly payments? I thought if I did interest=principle/rate/time and multiplied it all I would get the correct answer but the answer is 381, but how do I get this answer? Can someone break this down for me step by step? I want to be able to know properly how to solve this.
 

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Good old Finance, my favourite university course ever lol. The formula you use to calculate the monthly payments is as follows.

PV=PMT*PVIFA where PVIFA=(1-(1+r)^-t)/r

Assuming monthly compounding: r=0.11/12 per monthly period, t=30*12=360 and PV=40,000

PVIFA=(1-(1+0.11/12)^-360)/(0.11/12)=105.006346

Using the formula, PV=PMT*PVIFA:

40,000=PMT*105.006346

PMT=380.93 per month.
 

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Um, I'd write a program to handle that!
Integers, Floats as variable types. :lol
 
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