00:01
In this question, the motive is to calculate the cost of the house if paid in cash.
00:07
So here we can write the formula for loan amount and loan amount is denoted by p.
00:13
So this is here c which is the quarterly payment multiplied with it will be here 1 minus it is 1 plus r raised to the power negative n and then in the denominator it will be r.
00:28
So, let us see what are the values of r, n as well as c.
00:33
So, c is the quarterly payment which is equal to $4800 and r is the quarterly rate which can be obtained by dividing 0 .04 with 4.
00:48
So, this will be 0 .01.
00:50
This is quarterly rate and the number of payments that is the value of n will be equal to n so, if we plug in these values into the formula then the loan amount will be here 4800.
01:06
Now it is here 1 minus it will be 1 plus 0 .01.
01:13
Now it is raised to the power negative 18 and in the denominator it will be 0 .01.
01:20
So, we are going to get the value of p over here to be equals to it will be 78 and then it is here 711 .69...