Question

A pottery factory purchases a continuous belt conveyor kiln for $ 64 comma 000. A 7.7​% APR loan with monthly payments is taken out to purchase the kiln. If the monthly payments are $ 600.60​, over what term is this loan being​ paid?

Answer 1

n	Number of payments required =	Log [ 1/ [1 - PV× r/ P] ]/ Log(1+r)
PV =	Present value	$                         64,000.00
P=	Periodic payment	600.60
r=	Rate of interest per period
	Annual interest	7.70%
	Number of payments per year	12
	Interest rate per period	0.077/12=
	Interest rate per period	0.641667%
	Number of payments =	Log [ 1/ (1- 64000 × 0.00642/600.6) ]/ Log( 1+ 0.00642)
n=	Number of payments =	179.99
	Years	15.00

It takes 180 months to complete payment.

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