On December 31, Beth Klemkosky bought a yacht for $60,000. She paid $18,000 down and agreed...

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On December 31, Beth Klemkosky bought a yacht for $60,000. She paid $18,000 down and agreed...

On December 31, Beth Klemkosky bought a yacht for $60,000. She paid $18,000 down and agreed to pay the balance in 14 equal annual installments that include both the principal and 15 percent interest on the declining balance. How big will the annual payments be?

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Answer 1

Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Α B 1 Purchase price of yacht Down payment Loan Amount No. of Annual payment Annual interest rate $60,000.00 $18,000.00 $42,0

Cell reference -

A B _ 1 3 4 PV 5 N 6 1/Y 7 8 PMT Purchase price of yacht Down payment Loan Amount No. of Annual payment Annual interest rate

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.

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Answer 2

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