Question

pottery factory purchases a continuous belt conveyor kiln for $47.000. A 6.9% APR loan with monthly payments is taken out to purchase the kin. If the monthly payments are $480.84, over what form is this on being paid? A 12 years B. 10 years C. 13 years D. 11 years

Answer 1

The loan for the pottery factory's kiln will be paid off in approximately 11 years.

Step-by-step explanation:

The monthly payments for the pottery factory's kiln loan can be calculated using the formula PV = R(1-(1+i)^-n). In this case, the loan amount (PV) is $47,000, the monthly payment (R) is $480.84, and the annual interest rate (i) is 6.9%. To find the time (n) it takes to pay off the loan, we can rearrange the formula and solve for n. Plugging in the values, we get:

47,000 = 480.84(1-(1+0.069/12)^-n)

Dividing both sides by 480.84, we get:

97.805 = (1-(1+0.069/12)^-n)

Taking the natural logarithm of both sides, we can solve for n:

n ≈ 11 years

Therefore, the loan will be paid off in approximately 11 years.