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Ryan wishes to purchase a new boat and can afford monthly payments of up to $300 per month. Finance is available and the terms are that the loan lasts for 3 years, and the annual interest rate is 12%. What is the maximum price for a boat that Ryan's budget can afford

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TomShelby

Answer:

It can afford up to  $9,032.2515

Explanation:

We need to sovle for the present value of an annuity which installment are 300 dollar during 3 years (36 months) at a market rate of 12% annual that is 1% monthly

[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]

C 300.00

time 36

rate 0.01

[tex]300 \times \frac{1-(1+0.01)^{-36} }{0.01} = PV\\[/tex]

PV $9,032.2515

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