Find the payment necessary to amortize a 8% loan of $800 compounded quarterly, with 9 quarterly payments. The payment size is $ (Round to the nearest cent.) ...
Find the payment necessary to amortize a 8% loan of $800 compounded quarterly, with 9 quarterly payments. The payment size is $ (Round to the nearest cent.) ...
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Step 1
Time value of money :— According to this concept, value of money in present day is greater than the value of same sum of money in future date.
Present value :— It is the value of future cash flows in present day.
Present value = Future Value/(1+i)n
Or
Present value = Periodic cash flow × Present Value Annuity Factor @i% for n Period
Where, i = Periodic interest rate
n = Number of period
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