Question

Joseph bought a boat on 20 installments at 24% interest on 1/1/2020. He agreed to pay...

  1. Joseph bought a boat on 20 installments at 24% interest on 1/1/2020. He agreed to pay $2,000/month from 3/31/2020 for 20 months. What is the price of the boat? (PV of deferred

payments)

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Answer #1
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PMT= PV*i
1-(1+i)^-n
PMT= Monthly payment= 2000
PV= Loan amount= ?
n= no. of payments= 20
i 24%/12= 2%=0.02
2000= P*0.02
1-(1+0.02)^-20
2000= P*0.02
1-(1.02)^-20
2000= P*0.02
1-0.672971333108057
2000= P*0.02
0.3270287
P= (2000*0.327028666891943)/0.02
P= 32,702.87
The price of the boat is $ 32,702.87.
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