Question

You lost your notebook computer worth of $33,000. To make sure you learn from the experience,...

  1. You lost your notebook computer worth of $33,000. To make sure you learn from the experience, your father would support you to buy another computer, but require you to deliver the monthly payment of $800, with first payment made today. He insists to charge you 3.6% APR. How long does it take for you to pay back the money you owe to your father?

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Answer #1

Sol:

Present value (PV) = $33,000

Monthly payment (PMT) = $800

Interest rate = 3.6%, Monthly = 3.6 / 12 = 0.30%

Period (NPER)

To determine how long will it take for you to pay back the money you owe to your father, we can use NPER function in excel:

PV

33,000

Monthly payment

-800

Interest rate

0.30%

Period (Months)

43.96

Period (Years)

3.66

Therefore it will take approximately 43.96 months or 3.66 years for you to pay back the money.

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