Suppose you want to buy a new computer system and the store

Suppose you want to buy a new computer system and the store is willing to allow you to make mónthly payments. The entire computer system costs $3,500. The loan period is for 2 years, and the interest rate is 16.9% with monthly compounding. What is your monthly payment? ( work by hand with formulas, no financial calculator or excel)

Solution

Loan amount 3500 Rate of interest monthly (16.9/12) 1.4083% Monthly periods 24 Annuity for 24 periods at 1.4083% 20.2454 Monthly Instalment of loan (3500/20.2454) 172.88