Respuesta :
Given Information:
Monthly payment = $265
Interest rate = 7.5 %
time period = 3 years
Required Information:
Annual Present Value = ?
Answer:
Annual Present Value = $8,519
Explanation:
Monthly interest rate = 7.5/12 = 0.625 %
n = 12*3 = 36
Annual Present Value = $265 (1 - [1/(1+0.00625)³⁶]/0.00625)
Annual Present Value = $265 (32.147)
Annual Present Value = $8518.95 ≅ $8519
Therefore, you can afford to borrow $8,519 to buy a car.
Answer:
$8519.19
Explanation:
They used the future value discount formula of annuity
A=P(1-(1/1+r/n)^nt)/
( r/n )
Where
A=Final amount
P=initial amount
r=interest rate
n=number of times the interest will be paid
t=number of times the annuity will last
A =265(1-(1/1 + r/n)^12*3
Divide by
(0.075/12)
Equals
A=265*32.1479
A=$8519.19
