document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=201887>Question 201887</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Find the periodic payment that will render the sum.\r<BR>\n" );
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document.write( "S = $26,000, interest is 18% compounded monthly, payments made at the end of each month for 3 Years<BR>\n" );
document.write( "A) $549.96<BR>\n" );
document.write( "B) $7278.02<BR>\n" );
document.write( "C) $692.62<BR>\n" );
document.write( "D) $576.30 </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #152198 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=152198\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> payment is $549.96 per month which is answer (A).<BR>\n" );
document.write( "What it appears you are looking for is the annuity for a future amount.<BR>\n" );
document.write( "The future amount is $26,000<BR>\n" );
document.write( "The formula used to get this amount would be:<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=PMT%28FV%29+=+%28FV%2F%28%28%28%28%281%2Bi%29%5En%29-1%29%2Fi%29%29%29 ALIGN=MIDDLE  ALT=\"PMT%28FV%29+=+%28FV%2F%28%28%28%28%281%2Bi%29%5En%29-1%29%2Fi%29%29%29\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "PMT(FV) means payment for a future amount which is also called future value.<BR>\n" );
document.write( "FV means future value<BR>\n" );
document.write( "i = interest rate per time period<BR>\n" );
document.write( "n = number of time periods<BR>\n" );
document.write( "In this problem the time period was in months because the payments were made monthly and the interest rate was compounded monthly.<BR>\n" );
document.write( "the annual interest rate was divided by 12 to get the monthly interest rate.<BR>\n" );
document.write( "please note that interest rate = % interest / 100%.  since the annual % interest was 18%, the annual interest rate was .18.  In the formula, the interest rate is used, not the % interest.<BR>\n" );
document.write( "for this problem, the monthly interest became .18/12 = .015 which is the same as 1.5% expressed as a rate.<BR>\n" );
document.write( "the number of time periods was multiplied by 12 to get the number of time periods expressed in months.<BR>\n" );
document.write( "for this problem the number of timer periods became 3 * 12 = 36.<BR>\n" );
document.write( "after taking care of all that, just plug the numbers into the formula and calculate the result.<BR>\n" );
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