A buyer is considering purchasing a 35-acre parcel in Apache Junction, Arizona for economic development. The parcel has a sales price of $1,700,000. The buyer agrees with the seller for purchasing the property with 15% down up front and paying off the balance in 12-months. If a bank is willing to provide 6% annual interest, compounded monthly, how much should the monthly deposit be into that account to pay off the desired balance to the seller?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 15P
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A buyer is considering purchasing a 35-acre parcel in Apache Junction, Arizona for
economic development. The parcel has a sales price of $1,700,000. The buyer
agrees with the seller for purchasing the property with 15% down up front and paying
off the balance in 12-months. If a bank is willing to provide 6% annual interest,
compounded monthly, how much should the monthly deposit be into that account to
pay off the desired balance to the seller?
Transcribed Image Text:A buyer is considering purchasing a 35-acre parcel in Apache Junction, Arizona for economic development. The parcel has a sales price of $1,700,000. The buyer agrees with the seller for purchasing the property with 15% down up front and paying off the balance in 12-months. If a bank is willing to provide 6% annual interest, compounded monthly, how much should the monthly deposit be into that account to pay off the desired balance to the seller?
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