1. Shawn buys a new computer. He will make monthly payments of $72 for the next 2 years. He is charged 16% per year compounded monthly. How much did Shawn borrow to purchase the computer?

Guest Nov 1, 2017

#1**0 **

This is the formula you would use to find the amount Shawn borrowed to buy his computer.

PV=P{[1 + R]^N - 1 / [1 + R]^N} / R

PV =72x{[1 + 0.16/12]^(2*12) - 1 / [1 + 0.16/12]^(2*12)} / (0.16/12)

PV =72 x{[1.0133333]^24 - 1 / [1.0133333]^24} / 0.0133333

PV =72 x{[0.3742188] / [1.37421882]} / 0.0133333

PV =72 x 20.42353905682.........

**PV =$1,470.49 - This is the amount Shawn borrowed to buy the computer.**

Guest Nov 1, 2017