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7nadin3 [17]
3 years ago
8

Suppose you borrowed $37,000 at a rate of 9.0% and must repay it in 4 equal installments at the end of each of the next 4 years.

How large would your payments be?
Business
1 answer:
Eva8 [605]3 years ago
3 0

Answer:

C = 11,420.7405

Explanation:

Loan for 37,000 at 9% in four annual payment

We have to calculate the cuota of an annuity

C * \frac{1-(1+r)^{-time}}{rate} = PV\\

where rate = 0.09

time = 4

and present value is the 37,000 we receive today

C \times \frac{1-(1+0.09)^{-4}}{0.09} = 37,000\\\\\frac{37,000}{3.239719877} = C

C = 11,420.7405

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