Asked by Cindy
Nick would like to purchase a vacation timeshare, but he can only afford a $350 monthly loan payment. He wants the loan to extend 20 years, and the annual interest rate is 6%. How much money will Nick need to borrow if he repays the loan at $350 per month over the 20-year period of the loan?
350=P * (0.06*20)/12
350=P * (0.06*20)/12
Answers
Answered by
Reiny
That's a very creative formula you have there, but it makes no sense to me.
You want the present value of monthly payments of $350 for 20 years at 6% compounded monthly
PV = 350(1 - 1.005^-240)/.005
= 48,853.27
Btw, your P value turns out to be 319.50
Did you find that formula in your text or your notes ?
You want the present value of monthly payments of $350 for 20 years at 6% compounded monthly
PV = 350(1 - 1.005^-240)/.005
= 48,853.27
Btw, your P value turns out to be 319.50
Did you find that formula in your text or your notes ?
Answered by
Cindy
This question was in a math competition on April 2nd. I could The answer given was 48853.00
Answered by
Cindy
why a negative -240?
Answered by
Reiny
That's the way the standard formula is.
notice I had the correct answer.
notice I had the correct answer.
There are no AI answers yet. The ability to request AI answers is coming soon!
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.