SOLUTION: how much can lerato borrow from a bank if she can repay the loan by means of quarterly payments of R2000, starting at the end of the first quarter? the interest rate is 18% per ann

Question 1115038: how much can lerato borrow from a bank if she can repay the loan by means of quarterly payments of R2000, starting at the end of the first quarter? the interest rate is 18% per annum, compounded quarterly and the duration of the loan is 10 years
Answer by addingup(3677) (Show Source): You can put this solution on YOUR website!
this is a present value question.
2000{[1-(1+(0.18/4))^-(4*10)]/(0.18/4)}
= 2000[((1-(1.045)^-40)/0.045]
= 2000((1-0.1719)/0.045)
= 2000(18.40)
= 36800
lerato can borrow 36800 from a bank

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