Problema Solution
Using technology, determine the quarterly payment on a 4 year loan of $16,231 at 5.1% compounded quarterly. Round your answer to the nearest cent.
Answer provided by our tutors
We will use the Sinking Fund Payment formula:
R = S*i/((1 + i)^n - 1), where
R = the periodic payment;
S = $16,231 the future value;
i = 0.051/4 interest rate per period as decimal;
n = 4*4 = 16 periods the number of periods;
R = 16231*(0.051/4)/((1 + 0.051/4)^16 - 1)
........
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R = $920.91
The quarterly payment is $920.91.