Question

On April 1, 2021, John Vaughn purchased appliances from the Acme Appliance Company for $800. In order to increase sales, Acme allows customers to pay in installments and will defer any payments for six months. John will make 18 equal monthly payments, beginning October 1, 2021. The annual interest rate implicit in this agreement is 24%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Calculate the monthly payment necessary for John to pay for his purchases. (Do not round intermediate calculations. Round your final answer to nearest whole dollar amount.) Monthly payment

Answer 1

Answer: - first get the FV of $ 800 in 6 months, at a rate of 24°1. .: FV of $1 for a periods @2% z dates 1.12616 FV = 1:12616 X 800 = $900.96 MB Then get the amount of an annualy due, with a PV OR$900.96, with 18 monthly payments beginning on Oct, 1,2021. :: using Annuity due tables, Ite factor for a rate of 2% for 18 periods is 15.29187 : : Pr= Annuity x factor $ 900.96 = Annuity X 15.29187 .:: Annuily = $900.96 15:29187 = 58.92 is a monthly payment Thanks