EBK THE ECONOMICS OF MONEY, BANKING AND
EBK THE ECONOMICS OF MONEY, BANKING AND
4th Edition
ISBN: 8220100668203
Author: Mishkin
Publisher: PEARSON
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Chapter 4, Problem 1DAP
To determine

Assume that you borrow $20,000 to purchase a new automobile and that you finance it with a four-year loan at the most recent interest rate given in the database. If you make one payment per year for four years, what will the yearly payment be? What is the total amount that will be paid out on the $20,000 loan?

Concept Introduction:

Fixed installment formula - The fixed installment would be = P(1+R)

P stands for installment paid each month and R stands for interest rate per month.

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