A sum of $50,332 is to be repaid over a 9-year period through equal installments made at the end of
Jeff Asked: A sum of $50,332 is to be repaid over a 9-year period through equal installments made at the end of
A sum of $50,332 is to be repaid over a 9-year period through equal installments made at the end of each year. If an interest rate of 8.9% per year is charged on the unpaid balance and interest calculations are made at the end of each year, determine the size of each installment so that the loan (principal + interest charges) is amortized at the end of 9 years.
Am i supposed to use the sinking fund payment with this? If so is S of the formula $50332 or is R $50332?
If S is 50332 then I got 3881.67 for my answer. is this correct?
Answers:
amortization formula
PMT = PV[(r/n) / [1 – (1 + (r/n))^(-nt)]
PMT = 50332[(.089/1) / [1 – (1 + (.089/1))^(-1*9)]
PMT = 50332[.089 / (1 – 1.089^-9)]
PMT = 8361.2182992387688514934227634788
$8,361.22 a year for 9 years
P=Ai/1-(1+i)-n
P=(50332*.089)/(1-(1+.089)^-9)
P=$8361.22