Financing a Ring Mike buys a ring for his fiancee by paying a month for one year. If the interest rate is per year, compounded monthly, what is the price of the ring?
The price of the ring.
Mike buys a ring for his fiancee by paying a month for one year at the interest rate of per year, compounded monthly.
If the interest rate is then, the interest per time period is
The total no. of installments is
The price of the ring is
is the size of each payment,
is the time-period in years and
is the no. of period.
Substitute, the following in the equation given below,
The payment, are made monthly for .
Substitute, 1 for and 12 for in the equation given below,
Substitute 30 for ,
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