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Use the formula for the future value of an ordinary annuity to solve for n when A=$10,000, the monthly payment R=$800, and the annual interest rate= r= 9.0%

Guest Mar 6, 2017
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FV = P x {[1 + R]^N - 1 / R}

10,000 = 800 x {[1.09/12]^N - 1 / 0.09/12}

12.50 = [1.0075^N - 1/ 0.0075]

0.09375=[1.0075^N - 1]

1.09375 =1.0075^N take the log of both sides

N =Log(1.09375) / Log(1.0075)

N =11.993 ~ 12 months.

Guest Mar 6, 2017

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