My Math Forum Annuities question

 Economics Economics Forum - Financial Mathematics, Econometrics, Operations Research, Mathematical Finance, Computational Finance

 June 12th, 2012, 02:07 PM #1 Newbie   Joined: Jun 2012 Posts: 1 Thanks: 0 Annuities question A car costing $15000 requires a down payment of$3000 and has interest 9% p.a. compounded monthly for five years. How would you solve this question?
June 12th, 2012, 06:20 PM   #2
Math Team

Joined: Oct 2011

Posts: 14,412
Thanks: 1024

Re: Annuities question

Quote:
 Originally Posted by stomper123 A car costing $15000 requires a down payment of$3000 and has interest 9% p.a. compounded monthly for five years. How would you solve this question?
I see no question (except yours!) . Did you forget something?

 June 16th, 2012, 10:25 PM #3 Senior Member   Joined: Apr 2011 From: USA Posts: 782 Thanks: 1 Re: Annuities question Since the payment is the only thing missing, I would assume that's the question. You already seem to know it's an annuity. Then you determine if it's present value or future value. The cost of the car is now, so that's present value. PV annuity equation is: $\text{PV=Pmt\,\left(\frac{1-(1+i)^{-n}}i\right)}$ where i = interest per compounding period (i.e. rate divided by # of compounding periods in a year) n = total number of compounding periods (i.e. # of period in a year x years) You can solve for the payment with this. If it's not algebra based and you're using a financial calculator and Excel or something, you need to say so. Don't forget you're not financing the down payment.

 Tags annuities, question

,

,

,

,

,

,

,

,

,

,

,

,

,

# MATHS QUESTIONS ON ANNUITY

Click on a term to search for related topics.
 Thread Tools Display Modes Linear Mode

 Similar Threads Thread Thread Starter Forum Replies Last Post Noritaka Economics 19 May 19th, 2014 04:17 AM idonovan Economics 1 November 2nd, 2011 08:38 AM LePrestige Economics 0 August 26th, 2010 02:29 AM Vedmachka Advanced Statistics 1 April 14th, 2008 04:26 AM

 Contact - Home - Forums - Cryptocurrency Forum - Top