Question

The following formula is used to calculate the monthly payment on a personal loan.

P = PV 1 _________1 -(1+i)-n


In this formula, i represents the _____ of the loan.
a.
annual interest rate
b.
interest rate per period
c.
initial amount
d.
incident amount


Please select the best answer from the choices provided

Answer 1

b. interest rate per period

Explanation:

There are following terms while calculating the present value, future value, number of years, monthly payments, interest rate etc

Like

Present value = PV

Future value = FV

Number of years = n

Interest rate per period = i

Monthly payments = P or PMT

So in the given options, the second option is correct

Plus we can find out the PMT by using the excel i.e

= PMT(Rate,NPER,PV,FV,type)

The present value or future value come in negative as the case may be

Answer 2

Answer: interest rate per period

Explanation: