Question

Gracie has an offer to buy an item with a sticker price of $5700 by paying $170 a month for 48 months. Which of these groups of values plugged into the TVM Solver of a graphing calculator will give her the correct answer for the interest rate being offered?A) N=4; I%=; PV=0; PMT=-5700; FV=8160; P/Y=1; C/Y=12; PMT: END

B) N=4; I%=; PV=0; PMT=-5700; FV=170; P/Y=1; C/Y=12; PMT: END
C) N=4; I%=; PV=-5700; PMT=0; FV=170; P/Y=1; C/Y=12; PMT:END
D) N=4; I%=; PV=-5700; PMT=0; FV=8160; P/Y=1; C/Y=12; PMT:END

Answer 1

The right answer is option (D).

Step-by-step explanation:

According to the scenerio, the given data of the item for TVM solver is:

Number of years ( N ) = 48 months = 4 years

Present value ( PV ) = $5700

Current payments ( PMT ) = $0

Future value ( FV ) = $170 × 48 months = $8160

Mode = END

Compounding = Monthly = 12

Hence, the most appropriate answer is option (D).