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21 February, 23:06

Ken just purchased new furniture for his house at a cost of $16,400. The loan calls for weekly payments for the next 7 years at an annual interest rate of 10.99 percent. How much are his weekly payments?

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  1. 21 February, 23:32
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    His payments are $64.63 every week.

    Explanation:

    P = Regular Payments = ?

    PV = Loan Amount = $16,400

    r = rate of interest = 10.99%

    n = no of periods = 7 = 364

    P = [r (PV) ] / [1 - (1 + r) ^-n]

    P = (10.99%/52) * 16400 / 1 - [1 / (1 + 10.99%/52) ^364) ]

    P = 34.66076923 / 1 - [1 / 2.156503587]

    P = 34.66076923 / 0.53628642

    P = 64.63107760588

    P ≈ $64.63 weekly
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