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Math Help - Deferred payment

  1. #1
    Junior Member
    Joined
    Jun 2010
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    52

    Deferred payment

    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
    -64,000 pv
    0.662 i

    After giving it a little thought this is what I came up with...
    4
    (X,Y)
    8
    2ND F
    EFF
    8.243


    12
    (X,Y)
    8.243
    2ND F
    APR
    7.947 / 12 = 0.662

    -64,000 PV
    0 PMT
    0.662 I
    7 N
    COMP FV
    67,025.31


    -67,025.31 PV
    84 N
    0.662 I
    COMP
    PMT
    1,035.94


    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!
    Last edited by petedam; July 13th 2010 at 12:32 PM.
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  2. #2
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    Anyone?

    Thank you.
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  3. #3
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    Quote Originally Posted by petedam View Post
    Anyone?
    Thank you.
    I gave you the answer at the "other site"!!
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