To find: the present value PV of a loan.
$226,396.22
Given information:
It is given that, “the loan is with an annual interest rate r = 7.25% and periodic payments r = $953 for a term of t = 15 years, with payments made and interest charged 26 times per year”
The data given is:
Formula Used:
Present Value of an Annuity
The present value PV of an annuity consisting of n equal payments of R dollars earning an interest rate i per period (payment interval) is:
Explanation:
Here, the interest is credited 26 times a year, so the interest rate is:
The number of payments is:
Substitute these values in the above formula,
The present value is $226,396.22.
Chapter 3 Solutions
PRECALCULUS:GRAPHICAL,...-NASTA ED.
- Calculus: Early TranscendentalsCalculusISBN:9781285741550Author:James StewartPublisher:Cengage LearningThomas' Calculus (14th Edition)CalculusISBN:9780134438986Author:Joel R. Hass, Christopher E. Heil, Maurice D. WeirPublisher:PEARSONCalculus: Early Transcendentals (3rd Edition)CalculusISBN:9780134763644Author:William L. Briggs, Lyle Cochran, Bernard Gillett, Eric SchulzPublisher:PEARSON
- Calculus: Early TranscendentalsCalculusISBN:9781319050740Author:Jon Rogawski, Colin Adams, Robert FranzosaPublisher:W. H. FreemanCalculus: Early Transcendental FunctionsCalculusISBN:9781337552516Author:Ron Larson, Bruce H. EdwardsPublisher:Cengage Learning