Charles must make a loan payment of $1,620 at the end of each quarter. His nominal...
Charles must make a loan payment of $1,620 at the end of each quarter. His nominal annual loan rate is 5%, compounded quarterly. The original term of the loan was 13 years. How much did Charles originally borrow?
Homework Answers
Answer
the effective interest rate per quarter =nominal annual rate /number of compounding
=5/4
=1.25%=i=r
n=number of quarters =13*4=52
A=quaterlly payment =1620
PV=present value = originally borrowed amount
PV=A*(P|A,i,n)
PV=1620*(P|A,1.25%,52)
PV=1620*38.06773431135646
=61669.7296
the amount is $61669.73
=======
or
by formula
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