Answer:
The number of payments Kendra will have to make = 17.33 to pay off the loan completely within 18 months.
Explanation:
Paying $ 46.50 monthly, a financial calculator says it will take 18 months to pay off the loan which can also be calculated manually as follows:
[tex]\$ 750 \times \frac{8.4}{100}[/tex]
= $63 + $750
[tex]=\frac{\$ 813}{46.50}(\$ 46.50 \text { per month })[/tex]
= 18 months.
Amortization formula for “ n” the no of payments she will have to make is:
[tex]\mathbf{n}=\frac{-\log \left[1-\left(\mathbf{P} \times \frac{i}{A}\right)\right]}{\log (1+\mathbf{i})}[/tex]
here, P = principal value of loan $750
i = monthly interest rate 0.007
A = monthly payment 46.50
Substituting values in formula
[tex]n=\frac{-\log \left[1-\left(750 \times \frac{0.007}{46.50}\right)\right]}{\log (1+0.007)}[/tex]
[tex]n=\frac{-\log [1-0.1129]}{\log (1.007)}[/tex]
[tex]n=\frac{-\log [0.8871]}{3.029 \times 10^{-3}}[/tex]
[tex]n=\frac{0.052}{3.029 \times 10^{-3}}[/tex]
[tex]n=1.716[/tex]
The number of payments Kendra will have to make is 17.33 to pay off the loan completely within 18 months.
Answer:
N= ;1% = 8.4; PV=-750; PMT=46.5; FV=0; P/Y=12; C/Y=12; PMT:END
Explanation:
A p e x
