Ms. Maili Sirrus obtained a balloon loan of $239471 at a nominal rate of interest of 4.65 percent for 4 years. If repayment is scheduled at the end of every fifth day, obtain the level of the first few payments, assuming he will pay $ 36520 at the end of the term.
Round your final answer to 2 decimal places.
In this question, we have been asked to calculate the regular payments to be made by Ms. Maili Sirrus.
The Balloon loan is received today, therefore this is our PV.
PV = $239,471
At the end of the term, Ms. Maili wishes to pay $ 36,520, making this the VF
FV = $ 36,520
As the repayments are made every fifth day, we shall calculate N as follows:
N = (4*365)/5
N = 292
The interest rate is also to be calculated as:
1/Y = 4.65/ (365/5)
1/Y = 4.65/ 73
1/Y = 0.0637
We shall put the following inputs in the financial calculator:
N = 292
1/Y = 0.0637
PV = $239,471
FV = - $ 36,520 (Make sure to put the negative sign, as we are paying this)
Press CPT (Compute) PMT
We get PMT = - $ 785.16 (We get the negative sign, as these are payments to be made, i.e. outflow)
Payment = $ 785.16
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