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Artyom0805 [142]
2 years ago
14

You have just received an offer in the mail from Friendly Loans. The company is offering to loan you $4,500 with low monthly pay

ments of $80 per month. If the interest rate on the loan is an APR of 14.3 percent compounded monthly, how long will it take for you to pay off the loan
Business
1 answer:
Scorpion4ik [409]2 years ago
6 0

Answer:

It takes 8 years 4 months to pay off the loan.

Explanation:

Use Time Value of Money Techniques to find N (the period it takes to pay off the Principle Amount)

Using a financial calculator, enter the data as follows

PV = $4,500

PMT = - $80 × 12 = - $960

P/YR = 1

R = 14.3 %

FV = $0

Therefore, N = 8.3020

Conclusion ;

It takes 8 years 4 months to pay off the loan.

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