Tomasz purchased a new heating and air-conditioning system for his home and financed $9,100 at an annual interest rate of 2.2% compounded monthly for 3 years. How much interest (in dollars) will Tomasz pay over the term of the loan? (Round your answer to the nearest cent.)

Tomasz purchased a new heating and air-conditioning system for his home and financed $9,100 at an annual interest rate of 2.2% compounded monthly for 3 years. How much interest (in dollars) will Tomasz pay over the term of the loan? (Round your answer to the nearest cent.)

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

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Expert Solution

Step 1 Introduction

Time value of money:— According to this concept, value of money in present day is greater than the value of same sum of money in future date.

Future value :— It is the value of present cash flows in future date.

Future value

= Present value × (1+i)ⁿ

Where,

i = Periodic interest rate

n = Number of period

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