Question

A school realizes that they need a new copy machine for their main office. The copy machine costs $4,500. After speaking with the financial advisor, they decide to pay 10% of the cost of the machine in cash and finance the rest through their credit union. How much is their monthly payment if the credit union will charge 2% per year compounded monthly for 2 years

Answer 1

Answer:

The monthly payment is $172.29

Explanation:

The computation of the monthly payment is shown below:

Given that

NPER = 2 × 12 = 24

RATE = 2% ÷ 12 = 0.1666%

PV = $4,500 - $4500 × 10% = $4,050

FV = 0

The formula is given below:

= PMT(RATE,NPER,PV,FV,TYPE)

After applying the above formula

The monthly payment is $172.29