An organization wants to help your family finances. This includes a loan of ten thousand dollars with a thousand year term and at an annual interest rate of 8.0%. A loan of such a long repayment term will probably never exist. But assuming it does, will you accept it? Are you happy because they give you such a long term of years to repay the loan?
[Answer: Thanks for your generosity. But I think I can make it with a 100year term.]
[Procedure]
On the Loan calculation tab, type in 10,000 for the loan amount, 1000 for the number of years, 8.0 for the interest rate. Click the Calc button, and you get a monthly payment of $66.67. Enter different values for the number of years and you will get the following table for the monthly payment.
Loan
Term Years

Monthly
Payment


1

869.88

3

313.36

5

202.76

10

121.33

20

83.64

30

73.38

40

69.53

50

67.93

60

67.23

70

66.92

80

66.78

90

66.72

100

66.69

110

66.68

120

66.67

200

66.67

1000

66.67

2000

66.67

Or, you can quickly solve this question by looking at the loan payment formula. Click the F button to see the loan formulas. If the period n becomes very large, then A/P = i. Remember you need to convert the interest rate to a monthly rate since this is a monthly payment type. 8% divided by 12 equals 0.6667%. Then A = $10,000 x 0.6667% = $66.67. There is not a penny difference in the monthly payment between a 120year and a 1000year loan. So why should you pay 880 more years for nothing!