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 formula to find the area of a regular n-sided polygon?
+
Question: What is the result when dividing 3/4 by 2/5?
+
Math question: Find the length of the hypotenuse of a right triangle with leg lengths 6 and 8.
+
New questions in Mathematics
A normally distributed population has a mean of 118 with a standard deviation of 18. What score separates the lowest 72% of the distribution from the rest of the scores?
What is the coefficient of elasticity of the material that must be placed on the heel of the 10 cm high clog, with a base area of 2 cmΒ² so that it deforms only 2 cm when the force on it will be a maximum of 600 N.
Kayla has $8,836.00 in her savings account. The bank gives Kayla 5%of the amount of money in account as a customer bonus. What amount of money does the bank give Kayla? Justify your answer on a 6th grade level.
Determine the absolute extrema of the function 𝑓(π‘₯)=π‘₯3βˆ’18π‘₯2 96π‘₯ , on the interval [1,10]
6. Among 100 of products there are 20 rejects. We will randomly select 10 of products. The random variable X indicates the number of rejects among the selected products. Determine its distribution.
4x567
(2x+5)^3+(x-3)(x+3)
Divide 22 by 5 solve it by array and an area model
If the midpoint of point A on the x=3 line and point B on the y=-2 line is C(-2,0), what is the sum of the ordinate of point A and the abscissa of point B?
Find each coefficient described. Coefficient of u^2 in expansion of (u - 3)^3
2.380Γ— (1+0.05) / 0.95βˆ’0.05
You want to study incomes in a large city. You take a simple random sample of 5012 households and find that the distribution of household incomes is skewed right. If you calculate the mean of the 5012 household incomes will the distribution of mean scores be skewed right as well? Hint: this involves the Central Limit Theorem.
Take the limit of (sin(x-4))/(tan(x^2 - 16) as x approaches 4.
5x+13+7x-10=99
Let x be an integer. Prove that x^2 is even if and only if is divisible by 4.
In an economy with C= 10+0.8 Yd ; I= 20+0.1Y ; G= 100 ; X= 20 ; M=10+0.2Y ; T=-10+0.2Y and R= 10, when knew that Yd= Y-T+R. How much is the budget? A. -23.18 B. -28.13 C. -13.28 D. -32.18
Find the equation of a straight line that has slope 3 and passes through the point of (1, 7) . Write the equation of the line in general forms
Perform operations with the polynomials P(x) = x3 and Q(x) = 2x2 + x – 3x3 : a) P(x) - Q(x)
The average undergraduate cost per tuition, fees, room, and board for all institutions last year was $26,025. A random sample of 40 institutions of higher learning this year indicated that the mean tuition, fees, room, and board for the sample was $27,690, and the population standard deviation is $5492. At the 0.05 level of significance, is there sufficient evidence that the cost has increased? (Remember to follow the steps in hypothesis testing)
Marc, Jean and Michelle have traveled a lot. Marc drove twice as much as Jean, but it was Michelle who drove the most with 100km more than Marc. They respected their objective of not exceeding 1350km of distance. How far did John drive?