Thanks my friend. Please also check out www.SimpliTaught.com. I have created this FREE website to help students better understand their textbooks. Welcome any feedback
No, it does not. It just SHIFTS them one year. The total number of years does NOT change, only the timing of the payments changes. Out of context example: there are two ways you can brush your teeth three a day - BEFORE every meal or AFTER every meal. The first one is like annuity due, the second like ordinary annuity. Whatever you do, you always brush your teeth three times a day! 😌
Sure. "You want to buy a new car from Muscle Motors for $74,000. The contract is in the form of a 72-month annuity due at 7.05 percent. What's the monthly payment?
@@ZerosNd1s In this case, the payments will need to be made MONTHLY, which means that you first need to convert your annual interest rate into monthly. So 7.05/12. To find the monthly payment now, you can use the PMT function. You are essentially getting a $74,000 loan today, so PV = $74,000. There is no FV. Try =PMT function with these inputs. Should work. Basically the example I covered is one in which PMT is given and you have to calculate PV. In this question, it’s the other way around. And so instead of = PV you have to use =PMT function.
@@professorikram I definitely tried that. I even input 0.005875 just in case. I'm still getting the wrong answers so I think it may be something I did to the functions.
