You have a company that needs a new computer system that will cost $25,000.You put down $5,000 and finance the remainder at 12 percent,compounded monthly for 2 years.The bank will automatically deduct the payment from your account at the beginning of each month.What is your monthly equipment payment?
A)$2,677
B)$2,230
C)$1,176.83
D)$941.47

Question

Quizplus · Accepted Answer

The financed amount is $20,000 ($25,000 - $5,000). Using the formula for an annuity due (since payments are at the beginning of each period), the monthly payment is calculated as $941.47.

You Have a Company That Needs a New Computer System