To calculate the payment amount per period, we use the equation:
A = P [(i(1+i)^n) / ((1+i)^n -1)]
where A is the amount to be paid per period
P is the loan amount or the principal amount
i is the interest rate
n is the number of compounding period
The given are as follows:
P = 84700
i = 10% per year = 2.5% per quarter
n = 9 yrs = 36 quarters
Substituting the values:
A = P [(i(1+i)^n) / ((1+i)^n -1)]
A = 84700 [(.025(1+.025)^36) / ((1+.025)^36 -1)]
A = 3595.65 <--------amount to be paid per quarter
