So here's another question...I am having a little difficulty understanding deferred payment.
A lease contract, signed February 1, 2007 and has a cash value of $64,000, requires payments at the beginning of each month for seven (7) years, beginning February 1, 2009. The payments are deferred for two (2) years and interest is 8% compounded quarterly.
i figured out the payment to be $989.18/month.
here are the numbers that i used to figure this out.
n = 84
After giving it a little thought this is what I came up with...
7.947 / 12 = 0.662
Monthly payment is 1,166.66
My understanding of this question is...even though there's no payment for two years interest is being charged for the full 84 months. Correct?
Thank you very much!