Question

You have just received an offer in the mail from Friendly Loans. The company is offering...

You have just received an offer in the mail from Friendly Loans. The company is offering to loan you $3,250 with low monthly payments of $75 per month. If the interest rate on the loan is an APR of 14.9 percent compounded monthly, how long will it take for you to pay off the loan?

Multiple Choice

  • 67.40 months

  • 62.58 months

  • 43.33 months

  • 14.47 months

  • 58.41 months

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Answer #1

62.58 months

Number of periods = =nper(rate,pmt,-pv)
= 62.58
Where,
nper Number of periods ?
pmt periodical payment $               75
pv Present value of cash flows $         3,250
rate Interest rate 14.9%/12 = 0.01241667
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