The developer plans to get a loan that will be reapid with...

The developer plans to get a loan that will be reapid with unifrom payments of $450,000 beginning in year 2 and ending in year 16. How much will a bank be willing to loan at an interest rate of 11.00% per year?

Transcript

00:01 Hello students, we are given a question here that the developer plans in order to get a loan that will be repaid with a uniform payments of $4 ,000 over a 15 year period beginning in year 2 and ending in 16 years.

00:16 How much will a bank be willing to loan at an interest rate of 10 % per year? so first of all, what we are given? the rate of interest is given as equal to here 10 percentage students.

00:29 And as well as the pmt value is given as equals to here 4 lakh dollar okay which start from year to so we can write here starting from from year to okay students so now we can just say that here present value pv can be written as equal to obviously here it should be like pmt divided by 1 plus i whole power is n okay where n is the n is the term from which it is started okay students from it is actually a range can be said as range so now we can just put all those values here so pv can be written as equal to p m t is four lakh dollar students so four lack dollar divided by one plus i is 10 percentage it means 0 .1 and its whole power is will be equal to obviously 2 because it starts from year 2 okay students plus 4 lakh dollar divided by 1 plus i and whole power is 1 plus i is 0 .1 and whole power will be obviously after 2 there will be 3 plus 4 lakh dollar divided by 1 plus 0 .1 and whole power is 4 and dot dot dot up to it will go to the year 16 okay as we are given there is a 15 year period beginning with the year 2 and ending with 16 years so 16 minus it will include like from year to year 16 which will cover the 15 years so we can write here 4 lakh divided by 1 plus 0 .1 and whole power will be obviously 16 okay students so pv comes out as equals to here 4 lack divided by here we can just take common 4 lakh and divided by sorry times 1 divided by it should be 1 .1 whole square plus 1 divided by 1 divided by 1 .1 plus 1 divided by 1 1 .1 whole cube plus 1 divided by 1 .1 whole power is 4 plus dot dot plus 1 divided by 1 .1 whole power is 16...

Question

The developer plans to get a loan that will be reapid with unifrom payments of $450,000 beginning in year 2 and ending in year 16. How much will a bank be willing to loan at an interest rate of 11.00% per year?

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