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18 November, 12:33

Gracie has an offer to buy an item with a sticker price of $5700 by paying $170 a month for 48 months. Which of these groups of values plugged into the TVM Solver of a graphing calculator will give her the correct answer for the interest rate being offered? A) N=4; I%=; PV=0; PMT=-5700; FV=8160; P/Y=1; C/Y=12; PMT: END

B) N=4; I%=; PV=0; PMT=-5700; FV=170; P/Y=1; C/Y=12; PMT: END

C) N=4; I%=; PV=-5700; PMT=0; FV=170; P/Y=1; C/Y=12; PMT:END

D) N=4; I%=; PV=-5700; PMT=0; FV=8160; P/Y=1; C/Y=12; PMT:END

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Answers (1)
  1. 18 November, 13:04
    0
    The right answer is option (D).

    Explanation:

    According to the scenerio, the given data of the item for TVM solver is:

    Number of years (N) = 48 months = 4 years

    Present value (PV) = $5700

    Current payments (PMT) = $0

    Future value (FV) = $170 * 48 months = $8160

    Mode = END

    Compounding = Monthly = 12

    Hence, the most appropriate answer is option (D).
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