An $88,000 business can be purchased by making a down payment of $18,000 and financing the...
An $88,000 business can be purchased by making a down payment of $18,000 and financing the balance with a short-term business loan at 4.50% compounded monthly with monthly payments of $1,805. How long will it take to pay off the loan
Homework Answers
Business: $ 88000; Downpayment = $ 18000
Hence, Financing = $ 70000 (Present Value PV); Rate (RATE) = 4.50%; Payments = $ 1805 and Nature = Monthly Compounding
Using Excel formula for No.of Periods (NPER)
NPER(RATE,PMT,-PV,,0) = NPER(4.50%/12,1805,-70000,,0) = 36.28 Months
Answer: It will take 36.28 months (rounded off to 36 months) to pay off the loan.
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