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Sagot :
Answer:
a. $13,385.
Explanation:
Given - Green Industries purchased a machine from Cyan Corporation
on October 1, 2021. In payment for the $146,000 purchase,
Green issued a one-year installment note to be paid in equal
monthly payments at the end of each month. The payments
include interest at the rate of 18%.
To find - Monthly installment payments are closest to ?
Proof -
Given that ,
Purchase Amount = $ 146,000
No.of Periods (n) = 1 year(12 months)
Now,
Monthly interest rate (i) = Interest rate / No. Of Period
= [tex]\frac{18}{12}[/tex]% = 1.5%
Now,
Monthly installment payment = Machine Purchase Amount / Present Value of annuity
Here, n= 12 , i = 1.5%
So,
Present Value of annuity = 10.90751
∴ we get
Monthly installment payment = [tex]\frac{146,000}{10.90751}[/tex]
= $ 13,385
⇒Monthly installment payment = $ 13,385
So,
The correct answer is - a. $13,385.
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