A person borrows $10000 and agrees to repay a loan in equal instalments over 20 years. Interest is 12% pa on any money owing compounded quarterly. 

Expert Answers info

Angie Waters eNotes educator | Certified Educator

calendarEducator since 2012

write2,386 answers

starTop subjects are Literature, Math, and Social Sciences

Solve this using the present value formula ( he needs the money now )

`P= (x(1- (1+i)^-n))/ i`   substitute all the known values

`10 000= (x(1-(1+ 0.12/4)^-(20times 4)))/ (0.12/4)`  The interest is divided by 4...

(The entire section contains 102 words.)

Unlock This Answer Now

check Approved by eNotes Editorial