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Question 1 of 8

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Consider the balance model for a home-improvement loan

The loan balance is \(B_n\) after \(n\) periods, with \(B_0\)=$185,600

The nominal annual rate is 7.5%, compounded annually

The regular repayment is the quantity to be found

Interest is applied first, and the repayment is removed from the balance at the end of each year

After 2 years, the balance must be exhausted, so the target is zero

2 marks

Determine the periodic repayment for this model, giving a practical cent amount

Format: nearest cent