   Chapter 12.III, Problem 20RE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Loan Payment Time Nominal Kate Present Value Payment Frequency Period (years) (%) (Amount of Loan) 20. every 3 months 4 8.8 $9,000 To determine To calculate: The amount of loan payment where payment frequency is 3 month, time duration is 4 years, nominal rate of return is 8.8% and present value amount is$9,000.

Explanation

Given Information:

Payment frequency is 3 month, time duration is 4 years, nominal rate of return is 8.8% and present value amount is $9,000. Formula used: The formula to compute the amortization payment is, Amortization payment=PV×i1(1+i)n Where, PV is the present value, i is the interest rate per period, n is the number of periods. Calculation: Consider that Payment frequency is 3 month, time duration is 4 years, nominal rate of return is 8.8% and present value amount is$9,000.

The rate period is 2.2% or 0.022(8.8%÷4 period per year).

The number of periods is 16(4 years×4 period per year).

Substitute \$9,000 for present value, 0

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