Suppose that $2000 is loaned at a rate of 12%, compounded semiannually. Assuming that no payments are made, find the amount owed
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Answer:
a=1, b=1
Step-by-step explanation:
Given the equation:
If the solution of the equation
Then to find the values of a and b, we substitute into the equation.
The present value of an annuity is given by
where: PV is the current value of the annuity, P is the periodic payment, r is the apr, t is the number of compounding in one year and n is the number of years.
Thus, given that PV = $51,800; r = 7.8% = 0.078; t = 12; n = 4.
Therefore, the <span>monthly payment is $1,259.73</span>
where: PV is the current value of the annuity, P is the periodic payment, r is the apr, t is the number of compounding in one year and n is the number of years.
Thus, given that PV = $51,800; r = 7.8% = 0.078; t = 12; n = 4.
Therefore, the <span>monthly payment is $1,259.73</span>