Question

When purchasing a car and 3 documents worth $15,000 will be paid each to be paid in months 2, 4 and 6. If you wish to pay in 2 installments equal, in months 4 and 8. What should be the amount of these payments? Consider that money changes at a rate of 35% compounded semiannually monthly.

283

likes
1413 views

Answer to a math question When purchasing a car and 3 documents worth $15,000 will be paid each to be paid in months 2, 4 and 6. If you wish to pay in 2 installments equal, in months 4 and 8. What should be the amount of these payments? Consider that money changes at a rate of 35% compounded semiannually monthly.

Expert avatar
Brice
4.8
113 Answers
To solve this problem, we need to find the equivalent value of three payments of $15,000 each, due in months 2, 4, and 6, and then determine the size of two equal payments in months 4 and 8.

### Step 1: Calculate the monthly interest rate
Given a 35% annual interest rate compounded semiannually:
- Semiannual rate = 35% / 2 = 17.5% per half year.

To convert a semiannual rate to a monthly rate when compounded semiannually:
\left(1 + \text{Semiannual rate}\right)^{\left(\frac{1}{6}\right)} - 1

Calculating it:
\left(1 + 0.175\right)^{\left(\frac{1}{6}\right)} - 1 = \left(1.175\right)^{\left(\frac{1}{6}\right)} - 1 \approx 0.0273 \text{ or } 2.73\% \text{ per month}

### Step 2: Calculate the present value of payments at month 4
- **Month 2**: $15,000 due in 2 months discounted to month 4:
PV_{\text{month 2 to 4}} = \frac{15000}{(1.0273^2)} = \frac{15000}{1.0559} \approx 14212.48
- **Month 4**: $15,000 due in 0 months
PV_{\text{month 4}} = 15000
- **Month 6**: $15,000 due in 2 months forward from month 4:
PV_{\text{month 6 to 4}} = \frac{15000}{(1.0273^2)} = \frac{15000}{1.0559} \approx 14212.48

Total present value at month 4:
PV_{\text{total}} = 14212.48 + 15000 + 14212.48 \approx 43424.96

### Step 3: Calculate the amount of each of the two equal payments in months 4 and 8
Let x be the payment amount in months 4 and 8.

x + \frac{x}{(1.0273^4)} = 43424.96
x + \frac{x}{1.1145} = 43424.96
x (1 + \frac{1}{1.1145}) = 43424.96
x (1.7933) = 43424.96
x = \frac{43424.96}{1.7933} \approx 24223.72

### Answer:
Each of the two equal payments to be made in months 4 and 8 should be approximately $24,223.72 to cover the equivalent value of the three payments worth $15,000 each due in months 2, 4, and 6, considering the given interest rate.

Frequently asked questions (FAQs)
What is the resulting displacement when a vector of magnitude 5 units is added to a vector of magnitude 7 units at an angle of 60 degrees?
+
What is the limit of the combined rational expression (3x^2 + 2x + 1) / (4x - 1) as x approaches 2?
+
Math Question: Solve for x in the logarithmic equation logβ‚‚(x + 5) = 2
+
New questions in Mathematics
If we have the sequence: 3, 6, 12, 24 Please determine the 14th term.
Solution to the equation y'' - y' - 6y = 0
2+2
Additionally, the boss asked Armando to determine how many toy sales branches he would have in the fifteenth year, knowing that the first year they started with two branches, by the second they already had 5 branches and, by the third year, they had 8 branches. From the above, determine the number of branches it will have for the fifteenth year.
You are planning to buy a car worth $20,000. Which of the two deals described below would you choose, both with a 48-month term? (NB: estimate the monthly payment of each offer). i) the dealer offers to take 10% off the price, then lend you the balance at an annual percentage rate (APR) of 9%, monthly compounding. ii) the dealer offers to lend you $20,000 (i.e., no discount) at an APR of 3%, monthly compounding.
How many different ways can a psychology student select 5 subjects from a pool of 20 subjects and assign each one to a different experiment?
A pair of die is thrown and the absolute difference of the two scores is recorded. What is the probability of the absolute difference being 4 or more?
12(3+7)-5
7. Find the equation of the line passing through the points (βˆ’4,βˆ’2) π‘Žπ‘›π‘‘ (3,6), give the equation in the form π‘Žπ‘₯+𝑏𝑦+𝑐=0, where π‘Ž,𝑏,𝑐 are whole numbers and π‘Ž>0.
The market for economics textbooks is represented by the following supply and demand equations: P = 5 + 2Qs P = 20 - Qd Where P is the price in Β£s and Qs and Qd are the quantities supplied and demanded in thousands. What is the equilibrium price?
A machine produces 255 bolts in 24 minutes. At the same rate, how many bolts would be produced in 40 minutes?
The function h(t)=-5t^2+20t+60 models the height in meters of a ball t seconds after it’s thrown . Which describe the intercepts and vertex of this function
The probability of growing a seedling from a seed is 0.62. How many seeds do I need to plant so that the probability of growing at least one seedling is greater than or equal to 0.87?
For what values of m is point P (m, 1 - 2m) in the 2⁰ quadrant?
We have received our p&l statement back from accounts. The board has asked for an innovation hub. What items should we prioritise reviewing to decide if we can afford an innovation hub?
Calculate NPV, IRR and PAYBACK through a cash flow for a period of five years, with discount rate of: a) 10% b) 12% c) 15% initial annual cost $41,400,000
calculate the product of 4 and 1/8
Carmen's age was twice as old as Luis was when Carmen was Luis's age. When Luis is Carmen's age, their ages will add up to 112.
I have a complex function I would like to integrate over. I can use two approaches and they should give the same solution. If I want to find the contour integral βˆ«π›Ύπ‘§Β―π‘‘π‘§ for where 𝛾 is the circle |π‘§βˆ’π‘–|=3 oriented counterclockwise I get the following: ∫2πœ‹0𝑖+3π‘’π‘–π‘‘βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―βŽ―π‘‘(𝑖+3𝑒𝑖𝑑)=∫2πœ‹03𝑖(βˆ’π‘–+3π‘’βˆ’π‘–π‘‘)𝑒𝑖𝑑𝑑𝑑=18πœ‹π‘– If I directly apply the Residue Theorem, I would get βˆ«π›Ύπ‘§Β―π‘‘π‘§=2πœ‹π‘–Res(𝑓,𝑧=0)=2πœ‹π‘–
5 1/9 + 2 2/3