Find the periodic payment R required to amortize a loan of P dollars over t years with interest earned at the rate of r%/year compounded m times a year. Round your answer to the nearest cent.
P = 3,000, r = 5, t = 3, m = 4

A) R = $270.77
B) R = $263.29
C) R = $213.42
D) R = $294.30

Question

Find the periodic payment R required to amortize a loan of P dollars over t years with interest earned at the rate of r%/year compounded m times a year. Round your answer to the nearest cent. ​
P = 3,000, r = 5, t = 3, m = 4
​
A) R = $270.77
B) R = $263.29
C) R = $213.42
D) R = $294.30

Quizplus · Accepted Answer

The formula for the periodic payment R is:R = P * (r/m) / (1 - (1 + r/m)^(-mt))Plugging in the given values, we get:R = 3000 * (0.05/4) / (1 - (1 + 0.05/4)^(-4*3))= 3000 * 0.0125 / (1 - (1.0125)^(-12))= 3000 * 0.0125 / (1 - 0.7490)= 3000 * 0.0125 / 0.2510= 3000 * 0.05 / 1= $150Therefore, the periodic payment required to amortize the loan is $150.

Find the Periodic Payment R Required to Amortize a Loan