contestada

4. You have saved $8,000 to buy a snowmobile and can budget $2000 every six months to repay a loan. If you use your $8,000 savings for a down payment and get a 5 year loan at 6% APR (compounded semi-annually) with $2000 payments every six months, how much can you pay for the snowmobile

Respuesta :

anthougo

The amount that you can pay for the snowmobile is $33,679.09, using the future value formula.

What is the future value?

The future value is the value of a series of cash flows in the future.

It can be computed using an online finance calculator as below.

Data and Calculations:

N (# of periods) = 10 (5 years x 2)

I/Y (Interest per year) = 6%

PV (Present Value) = $8,000

PMT (Periodic Payment) = $2,000

Results:

FV = $33,679.09 ($20,000 + $5,670.09 + $8,000)

Sum of all periodic payments = $20,000.00 ($2,000 x 5 x 2)

Total Interest $5,679.09

Thus, you can afford to pay $33,679.09.

Learn more about future values at https://brainly.com/question/24703884

Otras preguntas