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Firm ABC spent $130,000 to refurbish its current facility. The firm borrowed 70 percent of the refurbishment cost at 4.5 percent interest for five years. What is the amount of each monthly payment

Respuesta :

Answer:

$1,696.51

Explanation:

For computing the amount of each monthly payment  we use PMT formula i.e to be shown in the attachment below:

Data provided in the question

Present value = $130,000 × 0.70 = $91,000

Future value = $0

Rate of interest = 4.5%  ÷ 12 = 0.375%

NPER = 5 years × 12 months = 60 months

The formula is shown below:

= -PMT(Rate;NPER;-PV;FV;type)

The present value come in negative

So, after applying the above formula, the monthly payment is $1,696.51

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