William bought himself a bike for $ 3000 (taxes included). The promotion offers 0% interest financing over 24 months. The amount of the bike is divided into 24 equal payments. At the same time, he found another banking institution that offered a placement rate of 6% per year capitalized monthly. So, he decides to invest a sum of money that should, from the following month, allow him to pay each of the monthly payments of his bike. How much does he have to invest in order to have the necessary money to pay for this bike?
#Interest question that is giving me a pain
iron igloo
karmic scaffold
William bought himself a bike for $ 3000 (taxes included). The promotion offers ...
So 0% interest
For 24 months
That means we can divide the amount into 24 parts
Monthly payment amount = 3000/24 = 125 dollars
karmic scaffold
So with the another case, I see there's a series of monthly investments
karmic scaffold
which formula are u using right now
I didn't use anything yet, I just divided the amount into 24 parts
iron igloo
alright
karmic scaffold
So with the another case, I see there's a series of monthly investments
$125 per month for 24 months at a 6% annual interest rate which is compounded monthly
Now we can use a formula
monthly interest rate = annual interest rate/number of compounding periods per year
iron igloo
aight
karmic scaffold
Monthly interest rate is 6% and the no. of compounding periods per year is 12 (because 12 months)
So monthly interest rate = 0.005
Now there's a formula which i need to check, just hold on
iron igloo
So monthly interest rate = 0.005
ye this doesn't look right
don't u need to put a +1 in there or sum
karmic scaffold
don't u need to put a +1 in there or sum
The next formula has such format
Just hold on
iron igloo
alr
karmic scaffold
Got it
The formula is
future value = monthly payment amount * (1 + monthly interest rate)^number of months
We just calculated monthly interest rate above
The monthly payment amount is 125 dollars
And the number of months are 24
So
,calc 125*(1+0.005)^24
scenic brookBOT
Result:
140.89497202567
bet
iron igloo
Result:
```
140.89497202567
```
thank you for helping me with this question it helped me a lot
i'll try to solve the others by myself