Equipment is being financed for 10 years by XYZ Corp. with monthly payments. The arrangement with the vendor worked out is as below.
The interest rate is ¾ % per month for the first 48 payments and for the remainder of the loan the interest rate would be 1 % per month.
The equipment cost $500,000.
-Determine the amount of 49-th monthly payment.

Question

Quizplus · Accepted Answer

A = [500,000 (F/P, ¾%, 48) ? 6,350 (F/A, ¾%, 48)] (A/P, 1%, 72)
= [500,000 (1.431) ? 6,350 (57.521)] (0.0196)
= $6,864.75

Equipment Is Being Financed for 10 Years by XYZ Corp