Respuesta :
Answer:
c. $455.75
Explanation:
The computation of the quarterly payments is shown below:
= Balance amount ÷ PVIFA factor for 2.5% at 12 years
where,
Balance amount is
= $5,500 - $5,500 × 15%
= $5,500 - $825
= $4,675
And the PVIFA factor for 2.5% at 12 years is 10.2578
Refer to the PVIFA table
So, the quarterly payments is
= $4,675 ÷ 10.2578
= $455.75
In the case of quarterly payments, the rate is one fourth and time period would be 4 times
The quarterly payment by Candy purchases a new guitar is $455.75.
What is the calculation of balance payment?
The initial payment computation:
[tex]5500-(5500*0.15)\\=4675[/tex]
Hence, the balance amount of $4675 would be used for the computation of quarterly payments.
What is the calculation of quarterly paymnet?
The PVIFA factor for 2.5% at 12 years is 10.2578
Therefore, quarterly payment would be:
[tex]\frac{4675}{PVIFA (2.5, 12)} \\=\frac{4675}{10.2578} \\=455.75[/tex]
Hence, the problem of present value of the annuity is described here.
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