00:01
Okay, so this problem wants me to calculate what payments are needed to pay for a loan that is for $2 ,500.
00:11
So we're looking for our r value.
00:15
This is part a, by the way.
00:18
Our interest rate is 6 % compounded quarterly.
00:25
So our interest rate we're going to be using is 0 .015.
00:30
And our number of periods.
00:34
This is quarterly.
00:35
So the years multiplied by four.
00:39
And so, oh, it gives us six quarterly payment.
00:46
So n is just equal to six.
00:50
Okay, so we can use our formula.
00:51
So we got 2 ,500 is equal to our r value times one minus 1 .015.
01:02
That's one plus our i value to the negative six power divided by 0 .015.
01:16
Therefore r is equal to 2 ,500 divided by, and now i'm going to put this in my calculator.
01:37
Okay, so that number comes up to be 5 .67.
01:41
This is the number in parentheses.
01:46
So the payment for each period for this year and a half, still putting stuff in the calculator.
02:00
So dividing that is going to equal $438 .81.
02:19
Okay.
02:19
So now that we have that, go on to part b.
02:26
Part b.
02:29
Okay, so part b, basically we're just going to take that r value.
02:33
We got in part one, that $438, $438.
02:43
We're going to multiply that by six, because that's how much they ended up totaled paying.
02:50
So 438 and 81 cents times six is going to be 2632 and 86 cents.
03:09
That's the grand total that they paid...