*A TV costing £800 pounds is paid by equal payments made at the end of the week for three years. Assume that there are 52 weeks in a year. The shop uses an interest rate of 29.9% per year. (a) Compute the weekly payment. (b) For the first payment, compute how much is used to pay interest and how much to pay off the loan. (c) You should have found that the interest component of the first payment is larger than the component used to pay off the loan. Which is the first payment where the interest component is smaller than the component used to pay off the loan?
*A TV costing £800 pounds is paid by equal payments made at the end of the week for three years. Assume that there are 52 weeks in a year. The shop uses an interest rate of 29.9% per year. (a) Compute the weekly payment. (b) For the first payment, compute how much is used to pay interest and how much to pay off the loan. (c) You should have found that the interest component of the first payment is larger than the component used to pay off the loan. Which is the first payment where the interest component is smaller than the component used to pay off the loan?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:4. * A TV costing £800 pounds is paid by equal payments made at the end of the week for three years.
Assume that there are 52 weeks in a year. The shop uses an interest rate of 29.9% per year.
(a) Compute the weekly payment.
(b) For the first payment, compute how much is used to pay interest and how much to pay off the loan.
(c) You should have found that the interest component of the first payment is larger than the component
used to pay off the loan. Which is the first payment where the interest component is smaller than the
component used to pay off the loan?
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