Computer Financing: Final Payment Calculation | Test Prep

Calculate the Final Payment for a Computer Financing Plan with Monthly Payments

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Question

Assume you buy a computer for $1,450 and agree to pay for it with 36 monthly payments of $55, beginning next month. What is the size of the final payment needed at month 36 to completely pay off the computer, if the interest rate you are being charged is 16% per year, compounded monthly?

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A. B. C. D. E.

B

This question describes a situation often called a balloon payment. On the BAII Plus, press 36 N, 16 divide 12 = I/Y, 1450 PV, 55 +/- PMT, CPT FV. On the

HP12C, press 36 n, 16 ENTER 12 divide i, 1450 PV, 55 CHS PMT, FV. The answer is shown as a negative number. Make sure the BAII Plus has the value of P/Y set to 1.

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