Posted by Icy on .
An article cost $29885. To buy this article, a down payment of $3420 is needed.If interest charged is 16% compunded quarterly, how much should be paid at the end of every 3 months for 1 year in order to payoff the balance?
please explain,i don't understand...thank you very much

math of investment 
drwls,
This is what is called an amortization problem. It is usually solved with a table or an iterating program. Here is a way to get the approximate answer directly. The principal due at the beginning is 298853420 = $26465. Over one year, with a declining balance, the average balance is $13232 and the interest on that amount over one year will be $2117.
It the loan is paid off in equal quarterly amounts, they must add up to 26465 + 2117 = $28582. The quarterly paymewnts should be 1/4 of that, or $7146.
Check:
Balance due at start (after down payment):
26465
After one quarter: add 1058.60 for interest due and subtract 7146 principal payment. Remaining balance = 20,377.60
After first quarter: add $815.10 interest and subract 7146 principl. Remaining balance = 14,046.70
After third quarter: add 561.87 interest and subtract 7146. Remaining balance = $7462.57
After fourth quarter: add $298.50 interest and subtract 7146. Remaining balance = $615.
For a second iteration, I would recommend adding $154 to each quarterly ayment, to get rid of the $615 deficit on the first attempt.
That makes the quarterly payment $7300 after one iteration. I end up overpaying $38 this way, so the third iterated answer is $10 less per quarter, or $7290. 
math of investment 
tin,
27523.60

math of investment 
drwls,
There is a handy amortization calculator at this web site:
http://www.yona.com/loan/
Enter the initial loan balance of 26465, the 16$ interest rate, and 4 quarterly payments.
Using it, with quarterly compounding you should get an exact loan payment of $7290.84 
math of investment 
vincent,
9765.25