To calculate the loan amount, we can use the formula for the present value of an annuity. The loan is repaid quarterly with equal installments. Substituting the given values in the formula will give us the loan amount.
To calculate the loan amount, we can use the formula for the present value of an annuity. The loan is repaid quarterly with equal installments. The formula is:
PV = PMT * (1 - (1 + r)^(-n))) / r
Where PV is the present value or loan amount, PMT is the installment amount, r is the interest rate per compounding period, and n is the number of compounding periods.
Substituting the given values, we have:
PV = 470 * (1 - (1 + 0.087/4)^(-10*4))) / (0.087/4)
Calculating this expression will give us the loan amount.