00:01
So in this problem, we're buying a sailboat, and the cellboat cost is $37 ,995.
00:08
And we're going to pay 10 % down.
00:11
Then we're going to amortize the rest over 10 years at 4 .6 compounded monthly 4 % rate.
00:19
Okay, so we need to know what the payments are going to be.
00:27
So the formula for payments on this annuity are the present value, times the interest rate we pay per period divided by one minus one over one plus r to the end the number of payments we make okay so we're paying this monthly over 10 years so that means 10 times 12 is 120 payments which is my end which means then that means then that 4 .6 % 0 .046 divided by 12 is going to be my r, right, the interest per period.
01:20
And i'm paying 10 % down.
01:24
So 37 -995 times 1 minus 0 .10 % will give me my present value.
01:37
37 -995 times 0 .9.
01:43
So this is 34195 .5 is my present value.
01:52
So plug in everything we've got now.
01:57
34195 times r 0 .046 over 12 divided by 1 minus 1 over 1 plus 0 .046 over 12.
02:18
To the 120th hour.
02:23
Okay.
02:27
So let's begin to calculate this.
02:29
So 34195.
02:32
Times 0 .046 divided by 12.
02:35
The numerator is 131 .08275 divided by 1 minus.
02:46
So let's see.
02:47
046 divided by 12.
02:50
Add one to that.
02:51
And then take that to the 120th power.
03:01
So this is 1 over 122 .22 .278.
03:14
This is 131 .08275 over.
03:24
Let's drive that from 1 .0 .99182 .2...