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9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). Wh
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Answer #1

Given that the borrowed amount or present value is $1000
Annual interest rate is 12%
To calculate the monthly payment, we need to divide the interest rate by 12.
The interest rate we need to use is 12%/12=1%
Time period is 2 years
When we are calculating the monthly payments, the number of periods for 2 years will be 2*12=24
As the borrowed amount will be repaid completely, the future value will be $0
We can determine the monthly payments using excel.

1000 1% 1 Present value 2 Future value 3 Interest rate 4 Number of periods 5 Payments 6 Formula used: ($47.07) PMT(B3,B4,B1,B
Answer: Hence, the monthly payment should be $47.07

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