A 10-year loan is to be repaid by quarter-end repayments of 8,000 starting in 3 months at an interest rate of 3.8% p.a. compounded quarterly. Or, it can be repaid by year-end repayments of $X staring in one year. Calculate the yearly repayments $X. Correct your answer to the nearest cent without any units. (Do not use "$" or "," in your answer. e.g. 12345.67)
First, let's find the loan amount
Quarterly rate, r = 3.8%/4 = 0.0095
Number of payments = 10 years * 4 quarters a year = 40 payments
This is the loan amount. Now we need to find the annual payment
n = 10
Effective annual rate = (1 + 0.0095)^4 - 1 = 0.03854493765
Year-end payments = 32,458.89
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A 10-year loan is to be repaid by quarter-end repayments of 8,000 starting in 3 months...
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