The formula m = P * ( (r/1200)(1 + r/1200)^N ) / ( (1 + r/1200)^N - 1 ) gives the monthly payment m needed to pay off a loan of P dollars at r percent annual interest over N months. Which of the following gives P in terms of m, r, and N?

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Accepted Answer

P = m * ( (1 + r/1200)^N - 1 ) / ( (r/1200)(1 + r/1200)^N )

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The formula m = P * ( (r/1200)(1 + r/1200)^N ) / ( (1 + r/1200)^N - 1 ) gives the monthly payment m needed to pay off a loan of P dollars at r percent annual interest over N months. Which of the following gives P in terms of m, r, and N?

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