(a) To determine To calculate: The amount of monthly payment. Explanation Given: Teresa Flores purchased law books at the cost of $ 14 , 000 and office furniture at the cost of $ 7 , 200 . Down payment of $ 1 , 200 has been paid, the principal amount will be paid in semiannual payments for 5 years at the rate of 12 % compounded semiannually. Formula used: Now, the monthly installment will be calculated by using the following formula: R = p i 1 − ( 1 + i ) − n Here, R is the monthly installment, p is the total cost, i is the monthly rate of interest and n is the number of payments. Calculation: The total cost of the things bought is calculated below: Total cost = cost of law books + cost of furniture = $ 14 , 000 + $ 7 , 200 = $ 21 , 200 The total cost is $ 21 , 200 . Now, to calculate the principal amount, the following formula has been applied: Principal = total cost − down payment = $ 21 , 200 − $ 1 , 200 = $ 20 , 000 Thus, the principal amount is $ 20 , 000 (b) To determine To calculate: The number of payments left when the loan has been reduced by $ 5 , 000 .

MATH W/APPLICAT.W/NOTES GDE +ACCESS CODE

11th Edition

ISBN: 9781323751671

Author: Lial

Publisher: PEARSON C

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Chapter 5.4, Problem 43E

(a)

To determine

To calculate: The amount of monthly payment.

(b)

To determine

To calculate: The number of payments left when the loan has been reduced by $5,000.

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Chapter 5.4, Problem 42E

Chapter 5.4, Problem 44E

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