3. Fred borrowed $25,000 for his new speedboat. He agreed to make monthly payments of $750,...

 

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3. Fred borrowed $25,000 for his new speedboat. He agreed to make monthly payments of $750, with the first payment now (and the second payment in 1 month etc.). Assume interest rates are i(12) = 18%. (a) How many regular payments (of $750) will Fred need to make? (b) What is the size of the final smaller drop payment (one period after the final regular payment of $750) needed to fully repay the loan? 3. Fred borrowed $25,000 for his new speedboat. He agreed to make monthly payments of $750, with the first payment now (and the second payment in 1 month etc.). Assume interest rates are i(12) = 18%. (a) How many regular payments (of $750) will Fred need to make? (b) What is the size of the final smaller drop payment (one period after the final regular payment of $750) needed to fully repay the loan?

Answer rating: 100% (QA)

a To calculate the number of regular payments Fred needs to make we can use the formula for the numb... View the full answer