A home appliance store finances purchases by charging an effective rate of 10% a.m. For a financed amount of BRL 250,000.00, determine the installment amount for the following payment alternatives: i) payment in 12 equal monthly installments; ii) payment in 4 equal quarterly installments.
30- A home appliance store finances purchases by charging an effective rate of 10% a.m. For a financed amount of BRL 250,000.00, determine the installment amount for the following payment alternatives:
- i) payment in 12 equal monthly installments;
- ii) payment in 4 equal quarterly installments.
Installments refer to payments made in regular intervals over a period of time, usually to pay off a debt or purchase an expensive item. They are often associated with loans, such as personal loans and mortgages, but can also be used for purchases made using credit cards or other financing options. The nominal interest rate is the stated or advertised rate of interest on a financial product, such as a loan or a bond. It is the rate at which the borrower borrows the money or the lender lends the money, and it does not take into account the effects of compounding. The effective interest rate, also known as the annual percentage yield (APY), takes into account the effects of compounding. It represents the actual interest rate that will be earned or paid over a year, including the effects of compounding.
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