Homework Answers
1) P = A(P/A, i%, n)
here in this case P =$85000, i = 1% n= 18
thus A = P/(P/A, 1%, 18)
= 85000/(16.398)
= $ 5183.5590 (required monthly payment )
required payoff on the 7th month is:
5183.5590 + 5183.5590 (P/A, 1%, 7)
= 5183.5590 + 5183.5590 (6.728)
= $ 40058.544
Hence, the required payoff on the 7th month is $40058.544
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