Answered: Assume that you have a monthly…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 6FPE

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Assume that you have a monthly installment for ten years, your loan is 10000, and the interest rate is 1% but it changes at the beginning of February rising 1%, and calculate the new installments.

10000/10=1000 yearly installment

1000/12 monthly installments

But the interest rate changed from February, so the first month's installments should be 1000/12, and the second month's installments should be 10000-(10000-1000/12)*3%

I want to know how to calculate that in a formula. I think we use AIFV=(1+0.03/12)^20 something like that to calculate

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