FutureTech Innovations is considering purchasing new equipment to increase production efficiency. The equipment will cost $500,000, and the company plans to finance this purchase with a loan that will be paid off with monthly payments over the next five years. The interest rate on the loan is 6% per year, compounded monthly.
FutureTech wishes to know the expected monthly payment to determine whether or not the term of the loan meets their monthly cashflows.
To determine if this investment is feasible, your task is to calculate the monthly loan payments of this annuity.