Using technology, determine the quarterly payment on a 4 year loan of $16,231 at 5.1% compounded quarterly. Round your answer to the nearest cent. a. $1,125.69 c. $1,518.85 b. $1,127.86 d. $1,508.31

Question

Mathematics

Cheyenne Fisher

11 February, 03:20

Using technology, determine the quarterly payment on a 4 year loan of $16,231 at 5.1% compounded quarterly. Round your answer to the nearest cent. a. $1,125.69 c. $1,518.85 b. $1,127.86 d. $1,508.31

+4

Answers (1)

Know the Answer?

Billy Maynard · Answer 1

Given:

loan = 16,231

interest rate = 5.1% compounded quarterly

payment is made quarterly.

To solve this, we use this equation:

P = A [1 - (1+i) ^-n] / i

where P is the principle loan = $16,231

i is the quarterly interest = 5.1% = 0.051

n is the number of quarters in 4 years = 4*4 = 16 quarters

A is the quarterly payment = ?

Substitute:

16,231 = A [1 - (1.051) ^-16] / 0.051

16,231 = A (1 - 0.4512) / 0.051

16,231 = A (10.7610)

A = 16,231 / 10.7610

A = $1508.31 per quarter

The quarterly payment is D. 1,508.31