--%>
Assignment Help - homework help

Formula for the payment required for a car loan

Which formula would you employ to solve out for the payment required for a car loan if you know the interest rate, length of the loan, and the borrowed amount?  Describe.

To solve for k while the known values are PVA, n, and PMT, begin with the present value of an annuity formula, as follows:

Present Value of an Annuity Formula, Table Method

PVA = PMT(PVIFA k, n)

Next, rearrange terms and solve out for (PVIFA k, n) as follows

PVA / PMT = (PVIFA k, n)

Now refer to the PVIFA values in the text.  You know n, therefore find the n row corresponding to the number of periods in your problem on the left hand side of the table. You have also find out the PVIFA, therefore move across the n row until you determine (or come close to) the value of PVIFA that you have solved for.  The percent column wherein the value is located is the interest rate.

   Related Questions in Finance Basics

  • Q : Describe factors cause change in

    Normal 0 false false

    		•
  • Q : State Section 31.00 Section 31.00 : It

    Section 31.00: It is a Control Section of Budget Act which specifies some administrative procedures. For illustration, the section subjects to the Budget Act appropriations to different sections of the Government Code, restricts the new positions a de

    		•
  • Q : Estimation of expected incremental cash

    How do we estimate expected incremental cash flows for proposed capital budgeting project? We estimate expected incremental cash flows for proposed project through estimating the changes in sales and expenses which are incremental to the project

    		•
  • Q : Clarify the duties of the financial

    Clarify the duties of the financial manager within a business firm.Financial managers measure the firm's performance, find out what the financial consequences will be if the firm maintains its present course or changes it, and suggest how the fi

    		•
  • Q : Creative destruction Normal 0 false

    Normal 0 false false

    		•
  • Q : Define the term Judgments Judgments :

    Judgments: It is generally refers to decisions made by courts against the state. The payment of judgments is subject to a range of controls and procedures.

    		•
  • Q : Why banks make short-term or

    Banks desire to make short-term, self-liquidating loans to businesses. Why? Banks desire to be able to illustrate where the funds are likely to come from such that the borrower is capable to employ to make the req

    		•
  • Q : What is Department Department: The

    Department: The governmental organization, generally belonging to the third level of the state organizational hierarchy as stated in the Uniform Codes Manual.

    		•
  • Q : Difference in annuities due or ordinary

    Normal 0 false false

    		•
  • Q : 222 what do you understand by planning

    what do you understand by planning premises

    		•