00:01
Hi, in this question we need to know two formulas, that is pm t equals pv into r by n the whole divided by 1 minus 1 plus r by n the whole power minus n into t.
00:19
Next formula is pv equals p m t into 1 minus 1 plus r by n the whole power minus n into t.
00:30
Minus n t divided by r by n where pv is present value pm t is payment or is annual percentage rate t is number of years so for first part they given that pv is $18 ,000 or is 4 .4 % t is 8 and n is compounded quarterly so or can be write it as 0 .04 here we need to use pm t for so on substituting all the known values in pmt formula we get pmt equals 18 ,000 into 0 .404 divided by 4.
01:22
The whole divided by 1 minus 1 plus 0 .04 divided by 4.
01:30
The whole power minus 4 into 8.
01:34
On further calculation we get the answer .044 divided by 4.
01:37
The whole power minus 4 into 8.
01:37
As dollar 670 .352 we need to write the answer in cents so it becomes 67035 cents for part b they given that pmt is hundred dollars or is nine percent which can be write it as 0 .09 t equals to an n is compounded monthly so we consider 12 on substituting all the values in the above formula, we get as 100 equals pv into 0 .09 divided by 12, divided by 1 minus 1 plus 0 .09 divided by 12, the whole power minus 2 into 12.
02:37
On further simplification, we get the answer as dollar 2188 .91.
02:45
We need to write the answer in cents...
