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Find the sum of the present values of two payments

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Reference no: EM132608642

Question 1

I buy a second-hand car for $15,995. The firm offers a nominal finance rate of 9.5% per annum and requires no deposit and 24 equal monthly repayments.

(a) How much would I pay each month?

(b) How much would I owe the finance company immediately after the 18th payment?

(c) How much of the first payment is interest?

(d) How much of the 19th payment is interest?

Question 2

Find the sum of the present values of two payments of $200 each to be paid at the end of year 3 and 8, if

(a) the simple-interest method at 6% per year is used, and

(b) interest is compounded quarterly at the nominal rate of 6% per year.

Reference no: EM132608642

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