Posted by Kimberly on Thursday, December 15, 2011 at 5:08pm.
i = .09/12 = .0075
n = 12(7) = 84
let the payment be P
50000 = P(1 - 1.0075^-84)/.0075
P = 804.45
balance after 1 year
= 50000(1.0075)^12 - 804.45(1.0075^12 - 1)/.0075
do the same steps for the last part of your question.
Could you please show me all the steps. I really need to understand this. there are 3 parts to be answered. I am so confused
Thank you so much..
I used the formula
Amount of single lump sum of money
= Principal (1 + i)^n
the present value of an annuity
PV = P( 1 - (1+i)^-n)/i
and the amount of an annuity
amount = P( (1+i)^n - 1)/i
where P is the annuity payment, i is the interest rate of each period expressed as a decimal and n is the number of periods
I showed all the steps necessary, I am sure you can insert any intermediate arithmetic answers if you need them
Balance owed at end of year 6
= 50000(1.0075)^72 - 804.45(1.0075^72 - 1)/.0075 = $9,198.86
Total repayment+ $67,574.13 based on $50,000 at 9% for 7 years.
Is this correct? Thanks for your help
balance after 6 years
= 50000(1.0075)^72-804.45(1.0075^72 - 6)/.0075= 9198.86
is that correct... Please
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