document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=998243>Question 998243</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Mike's Sporting Goods sells elliptical trainers under two payment plans: Under the installment plan, the customer pays $90.00 month over 5 years with interest vhanged on the balance at a rate of 19% year compounded monthly. Find the cash price for an elliptical trainer if it is equivalence to the price paid by a customer using the installment plan. Round your answer to two decimal places. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #616083 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=616083\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> f = future value<BR>\n" );
document.write( "p = present value<BR>\n" );
document.write( "r = interest rate per time period<BR>\n" );
document.write( "n = number of time periods.<BR>\n" );
document.write( "pmt = payment for each time period.<BR>\n" );
document.write( "end of time period payments are assumed.\r<BR>\n" );
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document.write( "f = 0<BR>\n" );
document.write( "p = what you want to find.<BR>\n" );
document.write( "r = .19 / 12 = .01583333 interest rate per monthly time period.<BR>\n" );
document.write( "n = 5 * 12 = 60 monthly time periods.<BR>\n" );
document.write( "pmt = 90\r<BR>\n" );
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document.write( "the result is that p (present value) is equal to 3469.47.\r<BR>\n" );
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document.write( "that is the cash price you would pay that is the equivalent of the present value of 90 dollars a month for 60 months at 19% per year compounded monthly.\r<BR>\n" );
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document.write( "you can use a financial calculator, like the one below, or you can use the annuity formula and solve it manually.\r<BR>\n" );
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document.write( "using the financial calculator, you would enter the rate as a percent.\r<BR>\n" );
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document.write( ".015833333333 * 100% = 1.5833333333%\r<BR>\n" );
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document.write( "you make the required entries and then you select PV.\r<BR>\n" );
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document.write( "my entries and the results are shown below:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2015/102201.jpg\" alt=\"$$$\" </>\r<BR>\n" );
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document.write( "the manual formula you would use is:\r<BR>\n" );
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document.write( "pv = pmt *  ((1 - (1 / (1 + r)^n)) / r)\r<BR>\n" );
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document.write( "using that formula you get:\r<BR>\n" );
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document.write( "pv = 90 * ((1 - (1/(1.01583333)^60)) / .01583333)\r<BR>\n" );
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document.write( "evaluate that equation and you get pv = 3469.47.\r<BR>\n" );
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document.write( "make sure you enter the parentheses in the right order and quantity.<BR>\n" );
document.write( "otherwise your answer will not be the same as i got above.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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