Question

New body, a gym, bought new exercise equipment on credit. the purchase price was $10,438.88. they secure the loan with a financing company that charges 6.25% per year compounded quarterly for 6 years. how much are their quarterly payments?

Answer 1

Using the payment formula,

rate = 6.25%/4 (since it is compounded quarterly)

PV = 10,438.88

n= 6*4= 24 (6 years * 4 quarters per year)

Payment amount would be $524.95