Explanation Given: The principal ( P ) value of loan is $ 24 , 500 , the rate ( r ) of interest is 9.6 % and the time ( t ) is 10 months. Formula Used: A = P ( 1 + r t ) , where ‘A’ be the future value of the loan, ‘P’ be the principal value of loan, ‘r’ be the rate of interest and ‘t’ be the time. Calculation: Step 1: Rate is expressed as a decimal while calculating the interest. Thus, to convert the rate percent into a decimal, rate percent is divided by 100. r = 9.6 % = 9.6 100 = 0.096 Step 2: The time is to be expressed in year. Thus, to convert the time into the year, the months are divided by 12

12th Edition

ISBN: 9780134776323

Author: MULLINS

Publisher: PEARSON CUSTOM PUB.(CONSIGNMENT)

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Chapter 5.1, Problem 20E

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To calculate: The value of future value (A) of the given loan.

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Chapter 5.1, Problem 19E

Chapter 5.1, Problem 21E

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