Todd can afford to pay $405 per month for the next 7 years in order to purchase a new car. The interest rate is 7.1 percent comp
ounded monthly. What is the most he can afford to pay for a new car today
1 answer:
Answer:
$26,747.48
Explanation:
In this question we use Present value formula that is shown in the attachment
Kindly find it below.
Given that,
Future value = $0
Rate of interest = 7.1% ÷ 12 = 0.59166%
NPER = 7 years × 12 = 84
PMT = $405
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after solving this, the price paid for a new car today is $26,747.49
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