4.Don James purchased a new automobile for $20,000. Don made a cash down payment of $5,000 and agreed to pay the remaining balance in 30 monthly installments, beginning one month from the date of purchase. Financing is available at a 24% annual interest rate. Required: Calculate the amount of the required monthly payment. Lang Warehouses borrowed $100,000 from a bank and signed a note requiring 20 annual payments of $13,388 beginning one year from the date of the agreement. Required: Determine the interest rate implicit in this agreement.

Respuesta :

Answer:

$670

Explanation:

The amount of the required monthly payment that James is required to pay can be calculated as follows.

DATA

Cost of automobile = $20000

Initial payment =  5000

Remaning Loan amount = PV = 15000

nper = 30 monthly installments

Rate per month = 24%pa = 24/12 = 2% per month

FV = 0 (Loan is fully paid in 30 Month)

Solution

Monthly payment = PMT(Rate,nper,PV,FV)

Monthly payment = PMT(2%,30,-15000,0)

Monthly payment = $670