College

Kendra took out a loan for $750 at an 8.4% APR, compounded monthly, to buy a stereo. If she will make monthly payments of $46.50 to pay off the loan, which of these groups of values plugged into the TVM Solver of a graphing calculator could be used to calculate the number of payments she will have to make?

A. N=; I% = 8.4; PV=-750; PMT=46.5; FV=0; P/Y=12; C/Y=12; PMT:END

B. N=; I% = 0.7; PV=-750; PMT=46.5; FV=0; P/Y=12; C/Y=12; PMT:END

C. N=; I% = 8.4; PV=-750; PMT=46.5; FV=0; P/Y=1; C/Y=12; PMT:END

D. N=; I% = 0.7; PV=-750; PMT=46.5; FV=0; P/Y=1; C/Y=12; PMT:END

Answer :

The number of payments Kendra will have to make can be determined by

OA: N=;1% = 8.4; PV=-750; PMT=46.5; FV=0; P/Y=12; C/Y=12; PMT:END.

The correct option to calculate the number of payments Kendra will have to make can be determined by considering the following:

N: Represents the number of periods or payments Kendra will make to pay off the loan.

1%: Represents the monthly interest rate, which is derived from the annual percentage rate (APR) of 8.4% divided by 12 months.

PV: Represents the present value of the loan, which is -$750 (negative because it's an outgoing cash flow).

PMT: Represents the monthly payment Kendra will make, which is $46.50 (negative because it's an outgoing cash flow).

FV: Represents the future value, which is 0 because the loan will be paid off completely.

P/Y: Represents the number of compounding periods per year, which is 12 for monthly compounding.

C/Y: Represents the number of payment periods per year, which is 12 for monthly payments.

PMT:END: Indicates that the monthly payment occurs at the end of each period.

Considering these factors, the correct option is OA: N=;1% = 8.4; PV=-750; PMT=46.5; FV=0; P/Y=12; C/Y=12; PMT:END.

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