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A dollar step series has payments that increase by a fixed dollar amount over a
period of time. A 9 payment series starting at 100 dollars and increasing by 100
dollars every three payments is illustrated below:
$100 $100 $100 $200 $200 $200 $300 $300 $300
Initial First dollar Second dollar
payments step step
In this series, the Number of Steps is 2, the Payments per Step is 3 and the Stepped amount is $100.00.
Amount Step - EXAMPLE |
The legal firm, Cook and Associates purchase a $95,000.00 office automation system from Zee Rocks Computers on April 12, 2011. The purchase is financed by Zee Rocks with a dollar step loan that calls for 16 quarterly payments starting at $5000. The annual interest rate is 11.5%, compounded monthly. The first payment is due on July 12, 2011. |
Solve The Stepped Amount.
Hint: Try to solve the problem by entering in all the known data from the example.
Then press the Compute button beside the Amount Step field.
Check the data you entered with the filled out screen shot below.
Press
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The Amount stepped each quarter is 363.62. |
