Question

Q7. Adelai Inc. loans you $32,000 for five years to buy a car. The loan must be repaid in
60 equal monthly payments. The annual interest rate on the loan is 8 percent. What is
your monthly payment? Round to two decimal places.

Q8. Your company has received a $50,000 loan from an industrial finance company. The
annual payments are $6,202.70. If the company is paying 9 percent interest per year, how
many loan payments must the company make? Round to the nearest number of periods.

Answer 1

Q7. Adelai Inc. loans you $32,000 for five years to buy a car. The loan must be repaid in 60 equal monthly payments. The annual interest rate on the loan is 8 percent. What is your monthly payment? Round to two decimal places.

Rate = Interest rate per period = 8% / 12 = 0.6667%

Period = 60

PV = -32000

Monthly payment = PMT (Rate, Period, PV) = PMT(0.6667%, 60, -32000) = $648.84

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Q8. Your company has received a $50,000 loan from an industrial finance company. The
annual payments are $6,202.70. If the company is paying 9 percent interest per year, how
many loan payments must the company make? Round to the nearest number of periods.

Rate = 9%

PMT = 6202.70

PV = -50000

Number of loan payments the company must make = NPER(Rate, PMT, PV) = NPER(9%, 6202.70, -50000) = 15