Overnight Trucking recently purchased a new truck costing $150,800. The firm fin

Question

Overnight Trucking recently purchased a new truck costing $150,800. The firm financed this purchase at 8.6 percent interest with monthly payments of $2,100. How many years will it take the firm to pay off this debt? A. 7.04 years B. 7.22 years C. 8.10 years D. 8.23 years E. 8.44 years

I want to use my financial calculator to solve this, but for some reason I am not getting the right answer.

I did 8.6%/12 = .00717= I/y

PV= -150800

PMT=2100

Fv=0

I get N= 71.997

I think I'm messing up on the rate. How do I do this in the financial calculator correctly?

Explanation / Answer

8.6% / 12 = 0.717%

Therefore, I/Y will be 0.717 and NOT 0.00717.

I/Y = 0.717

PV = -150800

PMT = 2100

N = 101.2465

101.2465 / 12 = 8.44 years

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.